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Illawarra REZ draft declaration

07 Feb 2023
Consultation updates

The draft Illawarra Renewable Energy Zone (REZ) declaration was exhibited between 23 December 2022 and 6 February 2023. We are currently reviewing and considering feedback before the final declaration is made later this year.

For more information, visit Illawarra Renewable Energy Zone.

What is the REZ declaration?

The REZ declaration is the first step in formalising the REZ under the Electricity Infrastructure Investment Act 2020 (the Act). It sets out the intended network capacity (size), geographical area (location) and infrastructure that will make up the REZ. This enables and sets the scope of key legislative functions under the Act, including access schemes and REZ network infrastructure projects.

The declaration will also note that EnergyCo will be the Infrastructure Planner for the Illawarra REZ. As Infrastructure Planner, we will make decisions such as assessing and recommending REZ network infrastructure projects and, if needed to maintain community support for the REZ, preventing generation or storage projects from connecting in a specified area within the REZ (if those projects have not received development consent).

EnergyCo prepared the draft declaration in a way that considers local priorities and values, land-use planning, investor interest and legislative requirements.

The draft declaration is for public exhibition and feedback only. It is not a declaration under the Act and has no legal effect. The final declaration will be made by the Minister for Energy under section 19(1) of the Act and published in the NSW Gazette. The Minister may decide to make the final declaration different to the draft declaration.

Once the final declaration is made, the Minister may amend it to expand the specified geographical area of the REZ, increase the intended network capacity, specify additional generation, storage and network infrastructure, provide further details and specifications or correct a minor error.

Draft geographical area of the REZ (location)

The draft geographical area for the Illawarra REZ was developed using a methodology including 19 data mapping layers (considering impact on land-use planning, environment, and heritage matters), results of the industry Registration of Interest (ROI) and consultation with local stakeholders.

A stylised map of the draft geographical area of the REZ is included below for reference. It includes the existing 132 kV and 330 kV transmission infrastructure near and in the REZ as a geographical reference.

A map of the geographical area of the REZ is also available in Schedule 1 of the draft declaration here. You can also view the methodology for defining the geographical area for the Illawarra REZ here.

View the map of the draft Illawarra REZ location.

Setting the intended network capacity (size)

The draft declaration sets out the intended network capacity for network infrastructure in the Illawarra REZ of 1 gigawatt (GW). This will provide sufficient transfer capacity for existing and committed generation in Southern NSW and the Illawarra to dispatch into the electricity grid.

Importantly, the capacity of the Illawarra REZ may increase over time with the growth of offshore wind and other emerging technologies.

Specifying the REZ network infrastructure

We have consulted with network planners, including the Australian Energy Market Operator to specify the network infrastructure that makes up the REZ.  

In summary, this is:

  • Planned, new and existing network infrastructure in the specified geographical area.

The above is a summary only. Interested parties should consult the full text in the draft declaration.

Further specified network, generation and storage infrastructure may be added to the declaration later. EnergyCo will update this website as further information and engagement opportunities become available.

Appointing EnergyCo as the Infrastructure Planner

As required by the Act, the Minister will formally appoint EnergyCo as the Infrastructure Planner for the Illawarra REZ and this will be noted in the declaration.

What does the declared REZ mean for me?

For regional communities and landholders

Upfront land-use planning and coordinated community consultation are central to the REZ model and will help ensure a strategic approach to electricity infrastructure development. The benefits of the REZ will be shared with communities, including First Nations people, in a coordinated and thoughtful way.

REZ access scheme and access fees

The Minister can declare an access scheme that is to apply in the REZ or part of the REZ. An access scheme will be required to follow a declaration process of its own and we will publish more details about this in future.

Generation and storage projects who wish to connect to network infrastructure which is subject to an access scheme will need to have the right to do so. They will be charged fees that will be used to fund community benefit and employment programs.

We will seek further feedback from local communities, including First Nations people, in the REZ about how EnergyCo and the Consumer Trustee can develop and deliver these initiatives.

New network infrastructure

New network infrastructure may be built in the REZ to enable new generation and storage projects to connect and transport their energy to consumers. We are in the early design stages of network infrastructure planning for the Illawarra REZ.

In its role as the Infrastructure Planner, EnergyCo will assess what network infrastructure should be built and make recommendations about this to the Consumer Trustee. After considering the Infrastructure Planner’s recommendations, the Consumer Trustee can authorise a REZ network infrastructure project, which can then be built, owned and operated following Part 5 of the Act, including receiving revenue determined by the regulator. Only network infrastructure projects that form part of a REZ can be authorised.

First Nations guidelines

An important part of delivering the REZ is ensuring there is genuine and meaningful consultation and engagement with local First Nations communities and maximising the economic opportunities the REZ will enable for these communities.

The NSW Government has released its First Nations guidelines to help support local Aboriginal communities as new energy infrastructure projects are rolled out across the State. Region-specific guidelines will also be developed for the Illawarra REZ. Each region-specific guideline will be co-developed with representatives from the local Aboriginal communities, with assistance from Aboriginal consultants to ensure engagement and consultation is culturally appropriate and that content is community driven and relevant to the needs and opportunities of the Aboriginal people and businesses of that region.

The Consumer Trustee is to take these guidelines into account tendering Long-Term Energy Service Agreements to projects, including projects in the REZ. The Consumer Trustee may also impose a condition on an authorisation for new REZ network infrastructure projects to ensure that the delivery of this infrastructure gives effect to the guidelines. Find out more about the First Nations guidelines here.

Prohibition to connect to network infrastructure

As the Infrastructure Planner, EnergyCo also has an important role to play in ensuring generation and storage projects connecting to the network infrastructure in the specified geographical area of the REZ have the support of the community. We can prohibit the connection of projects if needed to maintain community support (before those projects have received development consent).

EnergyCo has sought feedback on the draft guidelines on orders prohibiting connection to network infrastructure in REZs. The draft guidelines provide guidance on the purpose and scope of a connection prohibition order made under section 29 of the Act. You can find out more about the draft guidelines here.

Negotiation with renewable energy developers

If you have strong commercial opportunities for generation or storage projects on your land, you may be approached by renewable energy developers. To help landholders navigate any approaches or negotiations, the NSW Government funded NSW Farmers to develop the Renewable Energy Landholder Guide. The guide provides information to assist landholders at all stages of development and operation, particularly:

  • the role of landholders in the development process
  • landholder rights and responsibilities
  • potential impacts (positive and negative) of development.

You can view the guide on the NSW Farmers website.

While we have ensured the REZ does not bisect any property lot, some property holdings may be both within and outside of the REZ. If you believe you may be impacted by this and have any questions, please contact us so we can provide information about where the REZ boundary is, and what that means for you.

If you have any feedback, please contact EnergyCo via [email protected].

For project proponents and industry

Project proponents and industry will benefit from a coordinated approach to REZ development which provides greater investment certainty and reduces project costs. Strategic, upfront land-use planning and coordinated community consultation are central to REZs and will help ensure a strategic approach to electricity infrastructure development.

We will provide network solutions including transmission upgrades to REZs to open up the best renewable energy and storage resources, allowing for new generation, transmission and storage to be built in a coordinated manner. This includes reduced risk and uncertainty compared to the current open access framework, and the potential to receive a Long-Term Energy Service Agreement (LTESA).

Access schemes

The Minister can declare an access scheme that is to apply in the REZ or part of the REZ. The infrastructure that an access scheme applies to will be set out in an access scheme declaration and may be narrower than the network infrastructure specified in the REZ declaration.

Generation and storage projects who wish to connect to network infrastructure which is subject to an access scheme will need to have the right to do so, under the access scheme. This will provide access right holders with increased certainty of curtailment risks for access right holders while maintaining an efficient level of utilisation of the REZ scheme and create a streamlined connection process that will improve connection timeframes and reduce re-work and costs compared to the open-access connection process.

We are currently developing the Central-West Orana REZ Access Scheme and will consider whether it is appropriate to apply an access scheme for the Illawarra REZ. We will consult with industry and other stakeholders as part of this process.

Long-Term Energy Service Agreements

The Consumer Trustee will run competitive tender processes to offer LTESAs to project developers. LTESAs will provide revenue certainty for private investment in new renewable energy generation, firming and long-duration storage, which will help secure finance for project construction. They will provide projects with the option to receive an agreed minimum fixed price for their electricity services.

Renewable energy generation projects that are part of a REZ will have an advantage when competing for an LTESA against projects that are not part of a REZ. This is because renewable energy generation projects that are not part of a REZ must satisfy the Consumer Trustee that they have 'outstanding merit' in their bids for LTESAs.

How do I get involved?

The formal exhibition period for the draft declaration closed on Monday 6 February 2023.

If you have any feedback, please contact EnergyCo via [email protected].

Like all REZs, planning, designing and building the Illawarra REZ will be complex, taking some years to design and build. EnergyCo will continue to engage closely with the local community, industry, local government and other stakeholders as the design and delivery of the REZ progresses.