Renewable Energy Zones
Arrangements for the development of priority Renewable Energy Zones in the National Energy Market
On 11 August 2020 the ESB published a consultation paper and draft Renewable Energy Zones (REZ) Planning Rules. This consultation focuses on the Step 1 (planning) elements of the ESB’s REZ framework.
The draft REZ Planning Rules build on the actionable ISP Rule changes to co-ordinate the transmission and generation investments in alignment with the optimal development path for the power system in a way that has regard to the needs of communities and developers.
Submissions to the consultation paper are available here
At its meeting on 20 March 2020, the Council considered the need for interim arrangements to support the development of a number of priority Renewable Energy Zones (REZ) in the National Energy Market (NEM) ahead of longer term access reforms.
Ministers agreed to the twostep process recommended and that the Energy Security Board (ESB):
- Devise Rule changes to require the jurisdictional planner to develop a detailed and staged development plan for each priority REZ identified in the Integrated System Plan (ISP). These changes would build on the ‘actionable ISP’ changes; and
- Coordinate the development of a framework to address the implementation of REZs including funding and transfer capability protections.
The ESB will use Section 90F of the NEL to recommend Rule changes to implement the first step. A framework to deliver the second step is under development.
Overview of issues
The 2020 ISP forecasts that around 26 GW of new utility scale renewable generation capacity is required to 2040 for the optimal development of the power system. This is greater than the currently available hosting capacity in the relevant areas of the grid. Some of those areas of the grid already present difficulties for parties connected to or committed to connect.
The AEMC is undertaking the coordination of generation and transmission Investment (COGATI) review examining improved access arrangements. The ESB is also addressing some related issues through the post 2025 market design project. While these reviews will provide the longer-term framework, the ESB considers there is a need to establish short term arrangements to support the immediate development of several REZs to meet pressing requirements.
The ESB has proposed short-term arrangements to meet these requirements, through the establishment of a two step process for the urgent implementation of priority REZs.
Under the first step, it is proposed that the jurisdictional planning body should be the party responsible for undertaking detailed planning for the priority REZs identified in the ISP which are relevant to its network. The jurisdictional planning body would consider what transmission infrastructure is required for a REZ and consider the best place to locate connection hubs within a REZ.
The detailed assessment of a REZ and its breakdown into a sequence of REZ stages will increase understanding of the relevant zone and may modify the understanding of its costs.
The second step proposes developing a framework for the regulatory arrangements for the planning and development of stages within the REZ (where these stages have been identified)
The ESB is progressing Step 2 of the ESB’s framework, which relates to potential measures to support REZ implementation. A consultation paper will be published in the next 6-8 weeks.