CEFC confirms $490 million commitment to accelerate NSW grid transformation

Development of the Central West Orana Renewable Energy Zone is predicted to now accelerate with the federal government’s green bank announcing a $490 million commitment to support the development of key grid infrastructure in the New South Wales central west.

May 24, 2024 Ev Foley

Image: Transgrid

The Clean Energy Finance Corporation (CEFC) said the $490 million (USD 325 million) debt finance package will underpin expenditure related to transmission infrastructure required to unlock new solar, wind and storage capacity in the Central West Orana Renewable Energy Zone (REZ).

The Central-West Orana REZ, which encompasses an area of about 20,000 km2 around Dubbo, has an intended network capacity of 6 GW, with 4.5 GW of new capacity expected to be added before the end of the decade.

The CEFC said the debt finance will help EnergyCo, which is leading the development of the REZ transmission network infrastructure, to purchase land for the planned transmission rollout. It will also be used to acquire biodiversity offset credits that can be used to offset the loss of biodiversity values at impact sites.

EnergyCo is proposing to develop new 330 kV and 500 kV high-capacity transmission lines between a new substation at Wollar and energy hubs at Merotherie and Elong Elong. The initial network capacity of the transmission infrastructure is expected to be capable of connecting at least 3 GW of renewable energy generated by wind and solar projects, as well as another 2 GW of firming storage.

The release of this capacity was expected by September 2027 but EnergyCo has now revealed that the expected commissioning dates of the Central West Orana REZ Link has now been pushed back to August 2028.

EnergyCo said the finance agreement could potentially reduce project costs by $240 million over the 20-year tenure of the loan.

The investment, which draws from the federal government’s $19 billion Rewiring the Nation (RTN) Fund, marks the largest single transaction for the CEFC yet.

It comes as the Australian Energy Market Operator (AEMO) reinforced the urgent need for timely investment in projects to generate, store and share electricity to manage reliability risks driven by retiring coal plants, noting that “project development and commissioning delays are impacting reliability.”

CEFC Chief Executive Officer Ian Learmonth said the new investment signals the strength of the corporation’s focus on delivering capital in a timely manner to address the issue.

“Investing in our energy grid is one of the most exciting and important tasks ahead of us as we look to our net zero future,” he said. “There is both urgency and opportunity. As much as 46% of coal generation is to exit the national grid by 2030, and 100% by 2038.”

“With access to some of the world’s best solar and wind resources, such as those in the Central West Orana region, we have the potential to use this change to propel ourselves into a low emissions renewable energy future.”

CEFC RTN Fund Chief Information Officer Paul McCartney said the Central West Orana REZ will bring together key transmission, generation and storage assets, located near low-cost renewable energy resources.

“We cannot over-state the importance of this investment in helping to close looming gaps in our energy system as coal-fired generators exit the power mix,” he said.

One of five designated clean energy zones detailed in the NSW government’s Electricity Infrastructure Roadmap, the Central-West Orana REZ is expected to generate up to $10 billion in private investment in the region by 2030.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.