By Simon Corbell
The identification of 35 Renewable Energy Zones (REZs) across Australia’s National Electricity Market (NEM) is the first step in advancing decarbonised electricity supply. Last week, the Australian Energy Market Operator (AEMO) released its latest draft of the Integrated System Plan (ISP) which clearly shows that across the REZs there is sufficient resource potential for renewable energy to supply a minimum of 155,000MW of generation. This capacity is equivalent to roughly 315 TWh.
If we unlock this potential, we can deliver more than enough clean electricity to achieve a 100% renewable energy scenario (approximately 196 TWh) and would be well on the way towards achieving 200% renewables (approximately 396 TWh).
One of the challenges is the existing distribution and transmission networks. The existing network system is often highly constrained making it difficult to deliver clean, affordable electricity within the NEM. Our networks were not designed to shift large amounts of energy from areas that are rich in wind and solar resources. New or augmented transmission is needed.
New transmission infrastructure is currently funded through the RIT-T or regulatory investment test for transmission. This process is a mechanism that allows for cost recovery to come from end consumers. The RIT-T has proven incapable of moving fast enough to enable the timely development of REZs.
Alternative approaches to the RIT-T are now being considered. These solutions should allow for expedited investment and development of transmission infrastructure. Of these alternative approaches, the most promising is the NSW Government’s recently released Electricity Strategy. The strategy focuses on prioritis ing the development of the Central West REZ by 2025. The Central West REZ has the potential for up to 3000 MW of new, clean electricity generation, enough to power up to 1.3 million homes each year.
In the Electricity Strategy, NSW signals it will streamline and accelerate the planning approval frameworks in the Central West REZ. NSW will not only attempt to alleviate the current cumbersome RIT-T process but possibly remove the REZ from the existing RIT-T framework altogether. In addition, the NSW Government will seek to establish a more timely cost-benefit analysis mechanism for all REZs. This will enable generators to contribute up front to the costs of building new transmission infrastructure in return for guaranteed grid access.
It seems we are making progress on removing policy roadblocks, but if alternative approaches are not implemented, investment in Australia’s clean energy future will plateau.
More rapid policy and regulatory change is required if we are to maximise our nation’s abundant wind and solar resources and respond in time to mitigate climate change.