NSW paves way for 17 GW of renewables with declaration of final REZ

The New South Wales (NSW) government has officially declared the Illawarra Renewable Energy Zone (REZ), labelling the zone a key pillar of its plan to successfully transition from fossil fuels to renewables and storage over the next decade.

The Illawarra REZ, centred around the steel city of Wollongong south of Sydney, is the last of five renewable energy zones included in the NSW government’s Electricity Infrastructure Roadmap.

REZs are also being developed in the South-West, Hunter-Central Coast, New England and Central-West Orana regions and are expected to bring at least 12 GW of renewable energy and 2 GW of energy storage online by 2030, replacing the state’s ageing coal-fired power generators.

NSW Treasurer and Energy Minister Matt Kean said the declaration of the Illawarra REZ is part of the state government’s long-term plan to modernise the electricity grid with renewable energy and storage, helping to keep the system reliable.

Kean said the Illawarra is ideally positioned to host a REZ, thanks to its “existing energy, port and transport infrastructure, its highly skilled workforce and strong demand from existing industries to decarbonise.”

“The Illawarra has a proud history of manufacturing and the REZ will only build on this legacy, powering existing and emerging industries such as offshore wind, green hydrogen and green steel production,” he said.

The Energy Corporation of NSW (EnergyCo), which has been tasked with implementing the government’s REZs, said the declaration is the first step in formalising the REZ under the Electricity Infrastructure Investment Act 2020. It sets out the intended size, location and infrastructure that will make up the Illawarra REZ which runs down the coastline from Wollongong to Shellharbour and west to Dapto capturing existing infrastructure such as Port Kembla, Dapto Substation and the Tallawarra Power Station.

EnergyCo, which will be the infrastructure planner and will coordinate generation, firming, storage and transmission projects in all five of the NSW REZs, said the Illawarra REZ will deliver at least 1 GW of new network capacity.

“This will provide sufficient transfer capacity for existing and committed generation in southern NSW and the Illawarra to dispatch into the electricity grid,” it said, adding that “the capacity of the Illawarra REZ may increase over time with the growth of emerging industries such as offshore wind, green hydrogen and green steel manufacturing.”

The REZ has already attracted strong commercial interest with a recent call for expressions of interest receiving plans for 44 projects, including wind, solar, energy storage, pumped hydro and green hydrogen production totalling 17 GW of capacity.

EnergyCo said the proposals include five large-scale solar projects, 16 energy storage projects, including 11 batteries, and four pumped-hydro projects. Investors have also proposed eight offshore and two onshore wind energy projects, and three new “load projects” including green steel manufacturing.

“These projects have the potential to deliver thousands of jobs in the Illawarra as the region moves to a clean energy future,” Kean said, suggesting the projects will generate more than 8,300 jobs, “not including the huge employment potential of offshore wind.”

EnergyCo said it will now begin the next phase of development, including continuing to engage closely with the local community, industry, councils and other stakeholders.