NSW approves new transmission line in bid to accelerate energy transition

The NSW government has set the ball rolling on its ambitious Renewable Energy Zones plan with approval for a new 240km stretch of transmission lines to link the first of them to the grid.

NSW has approved a 240km stretch of transmission line and enabling infrastructure as Australia’s most populous state moves to accelerate its signature energy policy.

The planning approval is a critical step in NSW’s plan to develop five so-called Renewable Energy Zones (REZ), regions in which the state government plans to concentrate large-scale renewable energy generation capacity so as to minimise the upheaval on regional communities.

While the plan has attracted significant interest, renewable energy developers have said they could not progress plans for new zero emission projects until they had certainty that transmission lines would be developed. Without transmission lines, new renewable energy projects would be unable to connect into the grid, a risk that has left developers unable to progress plans.

In a move likely to accelerate plans, however, the NSW state Labor government said it has approved the first of the transmission lines, a 240km stretch of high-voltage infrastructure, to connect its Central-West Orana REZ.

NSW energy minister Penny Sharpe said the Central-West Orana REZ was the first to get approval for a transmission line and it would be a catalyst for new energy projects.

“This is the first REZ transmission project in the country to obtain planning approval, paving the way for a significant boost in renewable energy generation to replace ageing coal-fired power stations,” Ms Sharpe said.

“It’s not just about clean energy. This project will bring long-term financial benefits to both NSW electricity consumers and the local communities which will host the Central-West Orana REZ.”

Construction on the line is expected to begin later this year to allow the REZ to start operations in 2028. NSW expects the REZ to house renewable energy with a combined capacity of 4.5GW.

The approval of the transmission line comes as Australia struggles to secure community support for the necessary infrastructure. Australia needs to build about 10,000km of transmission lines by 2050 to connect the renewable energy projects required to adequately replace coal and meet expected growth in electricity demand.

Each of NSW’s planned Renewable Energy Zones will need transmission lines to connect them to the main grid. Picture: AFP

Some regional communities have vowed to oppose the infrastructure, however, insisting the transmission lines will damage their property values and disrupt farming operations, and they say the compensation they have been offered is inadequate.

The NSW government said it applied 100 conditions to the planning approval after consultation with the impacted communities.

In bid to strengthen support, the NSW government last year announced it would spend $128m over the next four years in the Central-West Orana REZ to deliver community projects and employment opportunities.

The Central-West Orana REZ will be the first of the planned five, in which NSW intends to establish 12GW of renewable energy projects and 2GW of storage, most likely large-scale batteries.

Each will need transmission lines to connect them to the main grid, but the Australian Energy Markets Operator (AEMO) has said bolstering the amount of renewable energy will help lower wholesale electricity prices.

NSW is under mounting pressure to deliver its transition roadmap as its largest coal power station, Origin Energy’s Eraring, will close by 2029, potentially even two years earlier. AEMO expects all coal power stations to close by 2038.

NSW was forced to strike a deal with Origin to ensure it stayed open until at least 2027 after an independent expert concluded allowing it to shut as planned next year would heighten prices and lift the risks of blackouts.

The state must now deliver its ambitious plan in time, but ample bottlenecks remain.

While transmission and community support are the two biggest obstacles, renewable energy developers have long complained that they face prolonged wait times to connect into the grid.

Ina bid to expedite the process, the Australian Energy Markets Commission – which sets the rules for the country’s electricity grid – on Thursday said it will tweak the industry laws to require new projects to demonstrate they can meet performance standards.

AEMC chair Anna Collyer said the final rule strikes the right balance for the transition.

“With nearly 600 renewable energy generation and storage projects currently in the connection queue, it is critical that we speed up the process without compromising system security.

“The final rule will help bring safe, clean and more affordable electricity to Australian homes and businesses sooner.”

Originally published as NSW approves new transmission line in bid to accelerate energy transition