The projects in the Central West are expected to bring 450 construction jobs to the region and generate enough electricity to power 1.3 million homes when completed.
The state government identified the Central West region as one of its three priority areas for luring clean energy investments. All three – including in the Riverina, near Hay; and New England, around Armidale – benefit from having good wind and solar resources but also proximity to existing transmission links and population centres.
“I want NSW households and businesses to have some of the cheapest and cleanest electricity in the world and this [zone] will bring in the low-cost solar and wind to do that,” Mr Kean said.
Deputy Premier John Barilaro, who is expected to join Mr Kean for the announcement of the zone’s progress on Tuesday in Dubbo, said the “phenomenal response” from investors to the zone would be a boon for a region “doing it tough from drought and now the COVID-19 pandemic”.
“By co-ordinating development in a strategic way, [renewable energy zones] also help us get the land-use planning right, and renewables built in places that work for the community, not just developers,” Mr Barilaro said.
The tumbling costs of new solar and wind farms mean such plants can be built at as little as half the cost of new coal- or gas-fired power stations, and typically much faster.
The challenge for governments, generators and regulators is increasingly how to integrate the largely intermittent sources of new electricity while maintaining grid stability.
The Australian Energy Market Operator on Monday published its report of the 2019-20 summer. The report showed how close the power sector came to widespread outages amid periods of record heat, bushfires and also record demand for electricity.
While 3000MW of new capacity added from new renewables since the previous summer helped, the new wind and solar farms also added to the complexity of forecasting, especially when smoke and dust affected output.
Bruce Mountain, director of the Victoria Energy Policy Centre, said investor interest in the new zone was “a tribute to the underlying economics” of renewables compared with fossil-fuel alternatives.
NSW support for three renewable energy zones was mirrored by efforts in other states to bolster clean energy, including Victoria with its auctions, South Australia with its push for new interconnectors to the east, and Tasmania with its promotion of another power link under Bass Strait and its pumped hydro projects.
All wanted the jobs and the energy export opportunities, and were increasingly sidestepping cumbersome rules of the National Electricity Market to grab them, Dr Mountain said.
State governments “were going back to the roles they played in their history”, he said. “It’s a question of who is going to break away most clearly.”
The push to open up renewable zones in inland NSW is part of the landmark $2 billion deal agreed and formally signed early this year between the Morrison and Berejiklian governments.
Peter Hannam writes on environment issues for The Sydney Morning Herald and The Age.