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NSW Renewable Energy Zones Offer Smart Strategy to Phase Off Coal

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The Australian government has finally committed to net-zero emissions by 2050. While this announcement is exciting, it will require considerable involvement from policy, finance, and engineering sectors to strategically coordinate the transition to a cleaner energy grid.  

And it will take input from all states to achieve this 2050 target.  

In New South Wales (NSW), there is extensive planning and development of renewable energy zones (REZs) — areas with high concentrations of clean, renewable energy. Developing these REZs with renewable energy generators, energy storage, and transmission capacity will provide NSW with the power to harness clean energy, reduce electric costs, and retire coal-fired power plants.  

The Central-West Orana REZ — The Pilot Program  

Formally declared on 5 November 2021, The Central-West Orana region was selected to be the first developed NSW REZ because of its proximity to the existent transmission network and for the area’s abundance of renewable energy resources. This pilot REZ is set to begin construction at the end of 2022 and is slated to deliver 3 GW of clean, renewable energy to the state’s electricity grid by mid-2020s.  

The state’s June 2020 Request of Interest (ROI) demonstrated incredible enthusiasm for the project, garnering 113 registrations of interest whose combined generation would contribute 27 GW of energy generation — nine times the amount designated for this REZ. This incredible interest incentivised the state to consider larger-scale projects for upcoming REZ in the state’s Energy Infrastructure Roadmap. 

The overflow of interest will allow NSW to be selective with its development, enabling the state to move forward with developers and plans that bring the greatest overall benefit to the region. It’s estimated that during peak development, the REZ will support 3,900 construction jobs — keeping those jobs local will boost the regional economy. In addition to job creation, a portion of the access fees paid by generating stations to guarantee connectivity to the transmission network will go directly to the local region and is estimated to bring $265 million to host communities by 2042.  

The Australian Energy Market Operator (AEMOAEMO, also known as an Australian Energy Market Operator. Is a body that manages electricity and gas systems and markets across Australia. Helping to ensure Australian's have access to affordable, secure and reliable energy.) has deemed the Central-West Orana REZ an ‘actionable’ transmission project, which means it is critical to address cost, security, and reliability issues across the entire National Electricity Market. With solar and wind being the most economic forms of power generation across Australia, the Central-West Orana REZ offers significant opportunity for the state to wean off uncompetitive coal-fired plants and drive down utility costs.   

New England REZ — The Largest REZ in NSW 

With momentum spurring from the outstanding interest for the Central-West Orana REZ, NSW increased the scope for its New England REZ to generate an expected 8 GW of energy, making it the largest REZ in the NSW roadmap. 

Given the rich potential for pumped-hydro projects in the New England area, this REZ will likely incorporate pumped-hydro technology into its infrastructure buildout, although the project is not yet to the stage of detailing development plans.  

The size and scope of the New England REZ are expected to support 830 operational jobs and 1,250 construction jobs each year. When completed, it should sufficiently power 3.5 million homes and enhance the area’s energy resiliency by connecting to existing high-voltage power lines that connect NSW and Queensland and allow NSW to export surplus energy to the neighbouring state.   

Other REZs in the NSW Roadmap  

The Central-West Orana REZ and New England REZ combined make NSW the leading state in Australia for investment in renewable energy. On top of these two REZ locations, NSW also includes three other REZ sites in its Energy Infrastructure Roadmap:  

  1.  South-West REZ — Chosen for large availability of solar resources and proximity to transmission project EnergyConnect, this REZ is currently in the Request for Interest phase, which will be open until the end of November.  
  1. Hunter-Central Coast & Illawarra REZs — These are the final two proposed REZs in the NSW Energy Infrastructure Roadmap. As with the other three REZ sites, these will take a number of years to plan and develop, and this planning phase will heavily involve communication and feedback from stakeholders to assure development coincides with regional economic activity and local community values.  

Electricity in NSW is currently powered primarily by coal. That is set to change as coal-fired power plants are scheduled to retire in the upcoming decades. The first set to shut down operations is the Liddell plant in the Hunter Valley region, planned to be fully closed in 2023. Others are expected to close in following years.

This adds gravity to the situation of advancing NSW REZ development so that the state continues to have reliable energy as it phases out coal.  

 

In addition to providing energy security, REZ development can also help transition Australia towards other energy markets as global demand for its coal exports declines. 

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What are Renewable Energy Zones (REZs) as described in the article?

Renewable Energy Zones (REZs) are areas with high concentrations of clean, renewable energy. In New South Wales (NSW), developing REZs with renewable energy generators, energy storage, and transmission capacity is intended to give the state the power to harness clean energy, reduce electricity costs, and retire coal-fired power plants.

Which REZ was selected as the pilot program in NSW, and why?

The Central-West Orana REZ was selected as the first NSW REZ, formally declared on 5 November 2021. It was chosen for its proximity to the existing transmission network and the area's abundance of renewable energy resources.

How much clean energy is the Central-West Orana REZ expected to deliver, and when?

The Central-West Orana REZ is set to begin construction at the end of 2022 and is slated to deliver 3 GW of clean, renewable energy to the state's electricity grid by the mid-2020s.

How much interest did NSW receive in its June 2020 Request of Interest (ROI) for the Central-West Orana REZ?

The June 2020 Request of Interest garnered 113 registrations of interest whose combined generation would contribute 27 GW of energy generation — nine times the amount designated for the Central-West Orana REZ.

What economic benefits is the Central-West Orana REZ expected to bring to host communities?

At peak development, the Central-West Orana REZ is estimated to support 3,900 construction jobs, keeping those jobs local to boost the regional economy. Additionally, a portion of access fees paid by generating stations for transmission network connectivity is estimated to bring $265 million to host communities by 2042.

What role does AEMO play regarding the Central-West Orana REZ?

The Australian Energy Market Operator (AEMO) has deemed the Central-West Orana REZ an 'actionable' transmission project, meaning it is critical to address cost, security, and reliability issues across the entire National Electricity Market.

What makes the New England REZ significant in the NSW roadmap?

The New England REZ is the largest REZ in the NSW roadmap, with its scope increased to generate an expected 8 GW of energy. It will likely incorporate pumped-hydro technology given the area's rich potential for pumped-hydro projects, although detailed development plans are not yet finalized.

What jobs and energy capacity is the New England REZ expected to support?

The New England REZ is expected to support 830 operational jobs and 1,250 construction jobs each year. When completed, it should sufficiently power 3.5 million homes and enhance energy resiliency by connecting to existing high-voltage power lines linking NSW and Queensland, allowing NSW to export surplus energy.

What other REZ sites are included in the NSW Energy Infrastructure Roadmap besides Central-West Orana and New England?

The NSW Energy Infrastructure Roadmap also includes three other REZ sites: the South-West REZ, and the Hunter-Central Coast and Illawarra REZs. The South-West REZ was chosen for its large availability of solar resources and proximity to the EnergyConnect transmission project, and at the time of the article was in the Request for Interest phase open until the end of November. The Hunter-Central Coast and Illawarra REZs are the final two proposed sites, which will take years to plan and involve significant stakeholder communication.

What is happening to coal-fired power plants in NSW according to the article?

Electricity in NSW is currently powered primarily by coal, but coal-fired power plants are scheduled to retire in the upcoming decades. The first to shut down is the Liddell plant in the Hunter Valley region, planned for full closure in 2023, with others expected to close in following years.

Why is REZ development important for NSW's energy transition beyond just phasing out coal?

According to the article, REZ development helps ensure NSW continues to have reliable energy as it phases out coal, and it can also help transition Australia towards other energy markets as global demand for its coal exports declines.

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