NSW unveils “first of its kind” access standards for new renewable energy zones

The NSW Government has released a draft of its proposed access standards for projects seeking to participate in the state’s ambitious Renewable Energy Zones – that could influence more than $30 billion in new investment in wind, solar and storage projects.

The access arrangements for the Renewable Energy Zones will guide how billions in anticipated investment in clean energy projects will be made – informing where the projects will be located and how they will connect to the grid.

On Wednesday, the Energy Corporation of NSW, which has been tasked with implementing the government’s renewable energy zones, released a consultation draft of its proposed access standards, for the first zone in the state’s Central-West Orana region.

The NSW Government is aiming to support the development of 12GW of new clean energy generation capacity, along with 2GW of energy storage capacity, that could spur as much as $32 billion in investment.

Similar arrangements are also under development in Queensland and Victoria.

The Renewable Energy Zones offer a potentially attractive deal for clean energy projects, with the ability to access coordinated investments in new network infrastructure and the offer of long-term energy supply agreements from the NSW Government that will help de-risk investments.

“By managing generation and storage connections in the REZs, the access schemes will enable active coordination of network, generation and storage investment,” the NSW Government said.

“This will help optimise the network, reducing bills for energy consumers, and improving planning outcomes for local communities.”

“The Central-West Orana Access Scheme will be the first of its kind in the NEM,” the consultation paper adds.

The NSW Government was inundated with $38 billion worth of proposed projects for the Orana-West zone, representing almost ten-times more generation capacity than the 3,000MW the state government aims to attract to the zone.

In February, the NSW Government unveiled a proposed transmission network corridor that could have the ability to support as much as 11GW of generation capacity, potentially leading to massive expansion of the zone.

The REZ scheme will help mitigate the risks currently faced by several new renewable energy developments due to lags in investment in new network infrastructure. Some parts of Australia’s grid have seen numerous wind and solar projects either delayed from connecting to the nnetwork or having their output curtailed, to manage network congestion.

By offering to coordinate new network infrastructure, the proposed renewable energy zones should come without the risk of connection delays and curtailment.

“REZ access schemes will govern the volume of projects that may be granted access rights to connect to REZ scheme infrastructure and define the terms and conditions of the access rights,” the NSW Government says.

“[It will] enable investment in new, low-cost generation and storage projects by providing increased certainty of curtailment risks for access right holders while maintaining an efficient level of utilisation of the REZ scheme infrastructure.”

In return for enjoying the benefits of participating in the renewable energy zones, projects will need to sign on to the proposed access standards, making performance commitments that ensure projects will have the ability to support the reliable operation of the grid.

This will include the proposed standards designed to manage the voltage, frequency and timing of generators and how the generators respond to potential disruptions within the electricity system.

“Proponents will need to agree to meet these standards as a condition of the access rights tender and to propose the REZ Access Standards in their application to connect to the REZ,” the consultation paper says.

“It is intended that the REZ Access Standards are set at a level that can be met by reasonable quality equipment that is currently in the market, and proponents accept they will not be negotiated.”

The access standards will detail the performance expectations of the projects connecting to the grid in the Renewable Energy Zones, ensuring they comply with the technical needs of the grid and that the projects commissioned can appropriately replace the coal fired generators expected to exit the NSW electricity market over the next decade.

Consultation on the proposed REZ access standards is open until 27 April.

Michael Mazengarb is a Sydney-based reporter with RenewEconomy, writing on climate change, clean energy, electric vehicles and politics. Before joining RenewEconomy, Michael worked in climate and energy policy for more than a decade.

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