TransGrid will conduct a detailed feasibility study to develop Australia’s first Renewable Energy Zone (REZ) in Central-West Orana, New South Wales (NSW).
The Central West NSW Energy Zone study acknowledges that the Australian energy system is transitioning from dispatchable thermal generation to largely variable renewable energy generation.
New transmission will be required to connect regions with strong renewable resources to load centres where the electricity demand is located, and to reduce network congestion.
The Central-West Orana region has been chosen for the pilot due to the existing investment, investor interest, relatively low build costs and a strong mix of solar and wind resources. The REZ is expected to deliver new electricity to help fill the anticipated gap from the retirement of ageing power stations in NSW.
TransGrid is collaborating with the NSW Government and ARENA on the project, which will assess the technical and commercial options for the development of new high voltage transmission lines to enable Australia’s first coordinated REZ, and demonstrate a pathway for future REZs across the National Electricity Market.
A detailed scoping study will be developed that will deliver a business case for the Central-West Orana REZ, including commercial viability and local community, consumer, and technical considerations. The study will investigate all aspects of delivering a REZ and provide a template for a national approach.
The Central-West Orana REZ will:
- Unlock at least 3000 MW of new electricity capacity by the mid-2020’s and be worth around $4.5 billion in private sector investment once fully developed,
- Support ~450 construction jobs in the local region,
- Deliver affordable energy ahead of the retirement of NSW’s coal fired power stations.
A test case, such as the 3,000 MW pilot in Central-West Orana, is expected to be highly informative for energy network businesses and regulatory bodies to ensure the regulatory framework can promote efficient investment outcomes.
Investment in the infrastructure will allow renewable energy providers from the region to connect to the grid and enable more affordable, reliable and clean energy for NSW customers.
Construction of the Central-West Orana REZ is due to begin at the end of 2022.
The NSW Government has already committed $9 million to the project and announced a further $31.2 million in funding alongside ARENA and TransGrid, including the establishment of a body to oversee the development of the new zone.