NSW maps out new renewable energy zone as shift from coal accelerates

The NSW government has published a draft declaration of the South-West Renewable Energy Zone, as preparation for the massive shift from coal to renewables accelerates.

The state government published a draft version of the declaration on Friday, which details the potential boundaries, the required network infrastructure and appointing a planner to facilitate the creation of the zone.

The declaration would establish a formal REZ in the south-west of the state, incorporating the towns of Hay, Balranald and Buronga, and would appoint EnergyCo NSW to act as the infrastructure planner for the zone, facilitating investments in new network infrastructure and additional renewable energy and storage capacity.

It is one of at least five REZs planned by the NSW government as it works to build enough infrastructure to replace at least four, or maybe even all five, of the state’s coal fire generators that could retire in the next decade.

The closure of the biggest coal generator in Australia Eraring, has been brought forward to 2025, from 2032, while Bayswater has been advanced to 2033 and could be brought forward to 2030 if enough new infrastructure is in place.

The government has already been overwhelmed by the sheer scale of the wind, solar and storage projects put forward by developers, although much work still needs to be done to formalise the processes for the auctions that will decide who gets the right to build.

“The Energy Corporation of NSW (EnergyCo) has worked with a range of stakeholders to prepare the draft declaration in a way that considers local priorities and values, land-use planning, investor interest and legislative requirements,” the NSW government said on Friday.

The NSW government has already been inundated with interest from prospective project developers interested in participating in the South-West REZ.

In February, the state government revealed that it had received interest from more than 34GW worth of wind, solar and storage projects wanting to build in the region, roughly 10-times more than the REZ is likely to host.

Participation in the zone would provide a significantly easier development pathway for prospective projects – as is its design – with the offer of coordinated network investments and Long-term Energy Service Agreements (LTESAs) that would effectively help underwrite investment in new projects by providing revenue certainty.

The declaration would also support the construction up to 2.5GW of network capacity, sufficient to support new investments in wind, solar and storage projects.

The draft declaration indicates that this is expected to include new network infrastructure designed provide network connections for new projects, and expand the amount of electricity that can be produced within the zone and then sent to the rest of the grid via high voltage transmission links.

The South West region is host to good quality wind and solar resources, and will also benefit from increased network capacity provided by the development of the Project EnergyConnect interconnector linking the New South Wales and South Australian grids.

The NSW government is progressing the creation of up to five renewable energy zones, which form part of its strategy for ensuring sufficient new generation capacity is built in time to adequately replace the state’s ageing fleet of coal fired power stations, expected to close over the coming decade.

All up, the strategy is expected to support up to 12GW of new renewable energy generation capacity and 2GW of energy storage, along with $32 billion in investment.

The NSW government is seeking feedback on the draft declaration until 22 April 2022, with the formal declaration expected to occur later in 2022.