Renewable Energy Zones

Latest update

On 5 January 2021 the ESB published a consultation paper on Renewable Energy Zones (REZs).

The purpose of this document is to outline the options for the implementation of REZs being considered by the ESB and to seek input from stakeholders. It sets out options for how REZs could be implemented in the near term, addressing the questions of how to establish a REZ, and how to maintain a REZ once it is established.

Longer term options for transmission access and congestion management will be further considered through the post 2025 market design initiative. This paper builds on the ESB’s work to develop REZ Planning Rules during Stage 1 of the interim REZ framework.

Background

Energy Ministers have asked ESB to develop arrangements to support the development of REZ as an interim measure ahead of longer-term access reforms. The ESB is conducting this project in accordance with a two-stage process:

  1. Rule changes that require the jurisdictional planner to develop a detailed and staged development plan for each priority REZ identified in the ISP. These changes would build on the actionable ISP Rule changes; and
  2. the development of a policy framework for the staged development of REZs within a REZ development plan.

The ESB has recently completed Stage 1 of this process. Following a consultation on draft Rules, the ESB has submitted REZ planning rules to Energy Ministers. The Stage 1 consultation paper, draft Renewable Energy Zones (REZ) Planning Rules, and submissions to the consultation paper are available here.

The purpose of the current REZ consultation paper is to consult on options relating to Stage 2. It addresses the questions of how to connect to, access, and fund shared transmission infrastructure within a REZ.

Overview of issues

Stage 1 of Interim REZ framework – REZ Planning Rules

Stage 1 recommends a framework for the preparation of REZ design reports.

REZ design reports would set out a cohesive, long term plan for the development of the REZ that leverages and contributes to the broader development of the power system. They also include a community impact assessment.

A key objective of the recommended Rules is to get transmission planners to engage with local communities so that social licence issues are understood at an earlier stage in the transmission planning process. This will increase the quality of the inputs to the Integrated System Plan.

The recommended Stage 1 Rules are an enhancement to the actionable ISP framework that can be implemented independently of Stage 2. They are focussed on planning and do not affect the funding arrangements or investment test that applies to REZs.

The ESB fast tracked this work due to the long lead times associated with the transmission planning process and the fact that it was a simpler, stand-alone piece of work.

Stage 2 of Interim REZ framework – REZ implementation

The Stage 2 REZ consultation paper sets out options for how REZs could be implemented in the near term, addressing the questions of how to establish a REZ, and how to maintain a REZ once it is established.

The REZ implementation options being considered are intended to be able to be implemented on a national, standalone basis without any broader reforms. The options discussed in this paper are intended to provide the fundamental measures for REZ implementation which may be complemented by the work of those State governments.

The paper discusses how a co-ordinated tender process could be used to overcome the current challenges faced by generators when they connect to the transmission network. It also sets out options for how to protect REZ generators from being constrained over time due to subsequent generation entry within the REZ causing worsening congestion or loss factors.

Interactions between REZs and transmission access reform

The ESB is releasing the REZ consultation paper in conjunction with the Post 2025 market design paper due to the close interaction between REZs and transmission access reform.

REZs provide a localised solution that applies to specific geographic locations within the power system. They are only a partial solution because outside the REZs, the problems associated with the current access regime would remain. As the power system evolves and electrical flows vary, issues outside the REZ will be felt inside the REZ.

The ESB is developing a set of reforms that could build on the REZ model to provide a stepping-stone towards the long-term, whole of system access solution. These reforms will be designed to mitigate the concerns raised by stakeholders in relation to transmission access reform.

Next Steps

Stakeholders are invited to provide comments in response to the Stage 2 REZ Consultation paper by 12 February 2021. The ESB intends to hold a webinar on the issues raised in the consultation paper on Mon, 1 February 2021 at 2-3:30pm AEDT. Interested parties are invited to register here.

Files

File name Size
PDF icon ESB Renewable Energy Zone Stakeholder Briefing 1 846 KB
PDF icon ESB REZ Planning Rules consultation paper 723 MB
PDF icon Draft REZ Planning Rules for consultation 308 KB

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