$225 million South West REZ investment to secure NSW energy future

Released by: Minister for Energy, Environment and Heritage and the Treasurer

The Minns Labor Government will invest $225 million in the 2026 NSW Budget to bring more low-cost renewable energy into the grid, helping put downward pressure on electricity bills while delivering investment, jobs and community benefits across the state’s south west.

The investment will support critical grid upgrades for the South West Renewable Energy Zone (REZ), allowing four new wind, solar and battery projects to connect to the electricity system as ageing coal-fired power stations retire.

Together, these projects could generate enough electricity to power around 1.6 million NSW homes each year, helping to secure our state’s energy future.

The South West REZ is one of the state’s most important energy projects, designed to strengthen electricity reliability, unlock new private investment and deliver affordable energy for NSW homes and businesses. The Minns Labor Government is taking action to fund the infrastructure needed to realise the potential of the REZ, after the previous Liberal National Government didn’t prioritise its delivery.

Planning is at an advanced stage, but critical works are needed to maximise what NSW consumers get out of the REZ. This investment will enable the extension of the 500 kilovolt transmission network through to Dinawan substation, through a range of activities including:

• Appointment of early works contractors.
• Progression of project development and design.
• Procurement of an additional transformer and other critical long-lead items such as circuit breakers.
• Early-stage construction works at the Dinawan substation to increase its capacity, which when completed will allow the existing lines connected to Dinawan will be used to run power at a higher capacity.
• Progression of critical project approvals.

The funding will unlock 1.3 gigawatts of network capacity, more than half the REZ’s total 2.5 gigawatts.
It will also give access rights holders the certainty they need to progress their projects: Bullawah Wind Farm (BayWa r.e.), the Yanco Delta Wind Farm (Origin Energy), Pottinger Energy Park (Someva Renewables and AGL) and the Dinawan Energy Hub (Spark Renewables).

The South West REZ stretches from west of Jerilderie to the Victorian border near Mildura and includes Buronga, Gol Gol, Balranald and Hay.

It is forecast to support around 1,690 direct jobs per year in the area during construction, and hundreds of ongoing jobs. It will also create broader economic benefits in local communities through increased demand for workers in local manufacturing, retail and transport and the supply of goods and services.

Minister for Energy, Penny Sharpe said: 

“Renewable energy is the cheapest form of new energy, and connecting more of it to the grid is one of the most important things we can do to put downward pressure on electricity bills.

“This investment will help make sure NSW has reliable energy as ageing coal fired power stations retire, while making sure communities in the South West share in the jobs, investment and opportunities created by the energy transition.

“This funding for the South West REZ will ensure the grid is fit for purpose, with vital upgrades to bring a significant amount of new renewable energy online for everyone in NSW.”

Treasurer Daniel Mookhey said:

"Families and businesses across NSW are doing it tough with energy costs. Every decision we make in this budget is about easing that pressure — and this investment directly delivers on that.

"To support NSW's clean energy transition is to support jobs, investment and cheaper power.

"The South West REZ alone unlocks $17 billion in private investment and nearly 1,700 construction jobs a year — that's what's at stake for communities across the region."