The second and biggest renewable energy zone to be unveiled by the NSW government looks to be fast-tracked after the state’s major transmission company TransGrid after it opened up the first stage of the ambitious project to expressions of interest from wind, solar and storage projects and announced a $3.45 million study into the infrastructure needed.
The study will look at the transmission infrastructure needed to support the New England renewable energy zone, which seeks to attract some 8GW of wind, solar and storage projects, as well as a plan for managing which projects will be provided guaranteed access to grid connections.
The New England region in central-north New South Wales is set to host the second Renewable Energy Zone planned by the NSW government, following its announcement by state energy minister Matt Kean last week.
The NSW government is hoping to attract more than $12 billion in new wind, solar and storage investment, amounting to 8,000MW of new generation capacity. The NSW government has already committed $79 million in funding to help manage the planning and development of the New England zone.
The New Energy Transmission Infrastructure (NETI) plan to be developed by TransGrid is expected to include a new 330kV transmission line and substation located to the east of Gunnedah to facilitate the addition of up to 1,400MW of peak supply from new wind and solar projects to be constructed in the New England region over the next three to five years.
Transgrid says that first stage is now open to expressions of interest from the developers of wind, solar and storage projects.
Participants will be asked to competitively bid an all-inclusive service fee for connection into the NETI, a transmission easement from Gunnedah to Tamworth, NSW. In return for the service fee, participants will have guaranteed access to the NETI and related rights, in addition to development obligations for up to a total of 1,400MW of new renewable generation.
The opening of the first stage at such short notice indicates, quite firmly, that the NSW government, Transgrid and AEMO are embracing the “step-change” scenario put forward by the Australian Energy Market Operator in its Integrated System Plan, its 20 year planning blueprint that is looks at how the grid can manage the clean energy transition.
That ISP predicts that NSW – the biggest state market in the national grid – will have the most dramatic transition to renewables and storage because its coal generators are getting old and less reliable, and will be retired over the next decade or two.
The federal government will chip in $995,000 towards the cost of the study through a grant provided by the Australian Renewable Energy Agency.
“This study will support and unlock more large scale renewable energy projects in the New England region in northern NSW,” ARENA CEO Darren Miller said. “Together, these TransGrid studies will provide two test cases for developing future renewable energy zones and the transmission infrastructure needed to support them.”
“Knowledge gained and shared during the study will also underpin other broad-based market reforms. It is hoped it will inform energy network businesses and regulatory bodies to develop the regulatory framework to promote more efficient investment outcomes,” Miller added.
As part of the early stages of the study, TransGrid has sought expressions of interests from renewable energy companies looking to make investments in the New England region.
TransGrid expects to design an effective auction process for network connections in the New Energy Transmission Infrastructure system, with project developers asked to make “competitive bids” for guaranteed access to the transmission network infrastructure.
TransGrid will propose the process as an alternative to the lengthy process currently undertaken by AEMO, providing a level of confidence for both TransGrid and renewable energy developers that sufficient capacity will be available for new wind and solar capacity to be connected to the network.
Several wind and solar projects have faced connection delays, or have been forced to significantly curtail output, due to network constraints in regions receiving a high level of investment in new projects. Regions in Victoria and Queensland have been particularly impacted by network issues, and had seen developers write down the value of investments in the impacted regions.
Grid connection delays and difficulties consistently ranks amongst the biggest barriers identified by developers holding back the growth of the sector, with some developers exiting the Australian market altogether due to ongoing frustrations.
With NSW government’s first Renewable Energy Zone, proposed for the Central-West Orana region attracting a massive 27GW of wind and solar proposals valued at $38 billion worth of investment, and both government and infrastructure planners are keen to ensure investments and grid connections are appropriately managed.
TransGrid received a $5 million grant from ARENA to undertake a similar network feasibility study for the Central-West renewable energy zone.
Local federal member for New England, Barnaby Joyce, who has not been a friend to the renewable energy sector, welcomed the investment the renewable energy sector was bringing to his own electorate.
“The Federal Government has delivered millions of dollars of investment already for renewable energy generation right here on our doorstep in places like Inverell and Glen Innes,” Joyce said.
“We still need baseload power supply from traditional energy sources but this shows we’re also looking to the future and planning for the transition when the technology and energy demand allows.”
TransGrid encouraged prospective project developers to make a submission to its expression of interest, to ensure they have the opportunity to be included in the company’s transmissions network plan.
“TransGrid Services welcomes the ARENA funding and we look forward to working with industry and renewable energy proponents in the region. We encourage companies looking to operate and connect to the grid in this area to respond to TransGrid Services’ EOI,” TransGrid executive manager of business growth Richard Lowe said.
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