National Electricity Market: Renewable Energy Zone expansions

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Increasing renewable energy generation
High Priority Initiative
Location
National Electricity Market
Geography
National
Category
Energy Transformation
Problem/Opportunity timeframe
Various (0-15 years)
Proposed By
Infrastructure Australia identified initiative
Date added to the IPL
26 February 2021
National Electricity Market Renewable Energy Zone expansions

Problem

The National Electricity Market (NEM) will require significant new grid-scale renewable energy generators to replace retiring thermal generation facilities.

The Australian Energy Market Operator (AEMO) has released the 2020 Integrated System Plan (ISP), which forecasts that over 26 Gigawatt (GW) of new grid‑scale renewables will be required by 2040.

The ISP forecasts that most of this will be met by Renewable Energy Zones (REZs). These are areas with high-quality renewable energy resources, which are suitable for
large-scale generation.

The 2019 Australian Infrastructure Audit found that coordinating investment in REZs will lead to lower wholesale and network costs for users over time.

Co-locating this investment means that the same transmission infrastructure can be used to reduce the overall amount of network investment needed.

The Infrastructure Priority List separately includes a High Priority Initiative for the future connectivity and reliability of the NEM, which includes transmission infrastructure to the REZs.

Proposed initiative

Potential options to address the initiative include expansion of existing or new REZs across the NEM. The infrastructure within these REZs could include new large-scale wind, solar and hydro.

For the 2020 ISP, AEMO has identified 35 candidate REZs by considering a mix of resources, current and future transmission network capacities and cost, and other technical and engineering considerations.

In 2020, various state governments announced plans to establish 14 new REZs. These include five in New South Wales, six in Victoria and three in Queensland.

Next steps

Proponent(s) to be identified.