by Chris Allan, Journalist, Energy magazine

In 2020, the Australian Energy Market Operator (AEMO) released its 20-year vision for the National Electricity Market (NEM). A winning move in their strategy for renewables is the state-led networking of Renewable Energy Zones (REZs) – regional hotspots rich with renewable potential. Here we take a look at how these special districts of renewables could completely transform both state energy infrastructure and the NEM.

Building an Australian energy market that is more secure, reliable and affordable will require nothing if not well informed decision-making. Over the next 20 years, Australia’s states will transform existing network transmission to meet challenges like emission reduction targets, the growth of load centres, as well as the fair integration of new and decentralised means of energy generation.

But despite mounting pressures to future-proof the NEM, it’s worth remembering that the smartest network upgrades can begin with simply ‘working backwards’: by closely assessing existing infrastructure and natural resource potential, policymakers and authorities can fine-tune the best strategies for state upgrades.

Enter the Renewable Energy Zones

REZs are geographic hotspots of potential – state-based regions that are best suited for large-scale renewable projects. At present, the state governments of Queensland, Victoria and New South Wales alone have committed to 14 Renewable Energy Zones, each zone featuring technologies like wind, solar, pumped hydro and battery storage.

The REZ report card In 2020, the Australian Energy Market Operator (AEMO) delivered a detailed report card of candidate REZs across the states as part of its Integrated System Plan (ISP), a twenty-year blueprint for the national electricity market.

AEMO’s REZ report card, a standardised assessment of renewable energy hotspots, graded REZs on key performance indicators like average capacity, correlation of output with regional demand, and best storage option.

Why REZs make sense

A standardised upgrade of Australia’s renewable energy hotspots would bring renewable hubs onto the same playing field as the highly-dispatchable energy sources of our recent past, such as coal-fired generation.

REZs empower state experts to find optimal solutions for current challenges like ‘at-capacity’ transmission infrastructure, emission reduction targets, and the fair management of decentralised and diverse energy sources. And emerging research continues to show that Australia’s renewable energy policy stands to benefit from regional solutions and technologies.

In July, the Blue Economy Cooperative Research Centre (BECRC) published a report that found that over 2,000GW of offshore wind power could be installed across Australia, all within 100km of existing substations and led by critical hotspots such as Newcastle, Gippsland, and Gladstone.

Renewable Energy Zones: state by state


Victoria has already committed to six Renewable Energy Zones across the state. The $540 million of REZ funding comes as part of a $1.6 billion clean energy package in the 2020-2021 State Budget.

While the Gippsland REZ has good existing network capacity via historical coal-fired power infrastructure, upgrades to address network capacity issues in other Victorian REZs would relieve the output restrictions and loss factors that currently face generators.

The Australian Renewable Energy Agency (ARENA) has already advised that existing thermal and system strength issues should be addressed to avoid further curtailment of current and future energy projects in two north-western REZs (Murray River, Western Victoria).

The six Victorian REZs are:

1. Gippsland (includes Hazlewood, Loy Yang regions) With Victoria’s highest rating of existing network capacity (2,000MW), AEMO predicts significant renewable energy generation in the Gippsland REZ with “the retirements of coal-fired generation”. The Gippsland REZ stands to benefit from both a robust existing network in the region as well as excellent potential for on- and off-shore wind power.

2. Central North (Shepparton, Glenrowan) The Central North REZ hosts existing solar projects, with modest potential for future solar and wind projects. However, an upgrade in transfer capability with NSW would unlock greater host capability (MW) for new projects.

3. Murray River (Bendigo, Kerang, Wemen, Red Cliffs) Despite its remoteness, large-scale solar in this REZ could boost interstate connections, should transfer capability with NSW be upgraded. At present, generators face restricted output due to network capacity issues (voltage stability, thermal limits).

4. Ovens Murray (Eildon, Dederang) According to AEMO, Ovens Murray was selected as a REZ candidate for both its existing pumped-hydro generation as well as its proximity to the Melbourne load centre, making it an ideal candidate for Step Change energy storage.

5. South West Victoria (Portland, Heywood, Terang, Mortlake) With moderate to good quality wind resources and large existing wind farms, the South West Victoria REZ has a 750MW hosting capacity via the 500kV network from Heywood to Moorabool.

6. Western Victoria (Ballarat, North Ballarat, Waubra, Bulgana, Horsham) While wind resources in the Western Victoria REZ are graded by AEMO as good to excellent, the current network is constrained and desperately needs transmission upgrades, with both interstate and regional augmentations on the cards.


In Queensland and, the State Treasury has allocated $145 million to launch three Queensland Renewable Energy Zones (QREZs) – corridor-like projects that span many of the original candidate hotspots proposed by AEMO. In September 2020, 192 projects registered their interest to be part of Queensland’s renewables pipeline.

The three QREZs are:

1. The Northern QREZ (includes Cairns, Townsville, and Mackay) The Northern QREZ offers excellent wind resources, and the Queensland Government has already secured $40 million in transmission upgrades between Cairns and Townsville that could unlock 500MW of new energy production. The lead project under construction in the Northern QREZ is a 157MW wind farm at the Kaban Green Power Hub, scheduled to be operational by 2023. Further wind projects in the region could importantly “balance out” the uptime of energy production further south in the national electricity market. Queensland Premier, Annastacia Palaszczuk, assured that alongside the Kidston Pumped Hydro Storage Project, the Kaban wind farm will “power the North and keep Queensland on track to meet our 50 per cent renewables target by 2030”.

2. The Central QREZ (Gladstone, Bundaberg) The Australia New Zealand Infrastructure Pipeline (ANZIP) has identified Fitzroy and Wide Bay as probable locations for new renewable projects in the Central QREZ, which accepted registrations of interest (ROI) in September 2020. The AEMO REZ report card found that the Fitzroy REZ has good solar and wind resources despite no existing renewable projects, while Wide Bay already features modest solar farms. Although AEMO concluded that “significant transmission build” is needed to allow new projects in the Gladstone region to service the state’s southern load centres, storage options such as pumped hydro and batteries could be invaluable for buffering any future generation in the region.

3. The Southern QREZ (Toowoomba, Brisbane) The Southern QREZ accepted registrations of interest (ROI) in September 2020, with the Darling Downs region being a key site for future project announcements. AEMO’s report card on the Darling Downs region found that it offers not only good solar and wind resources, but also “a strong network with good potential to connect renewable generation”. As the only Queensland candidate REZ with access to the transmission network at 330kV, the Darling Downs region could lead support of the nearby load centre of Brisbane via a combination of wind projects and solar projects, with select storage options.

New South Wales

In its 2020 Electricity Infrastructure Roadmap, the New South Wales Government committed to building five Renewable Energy Zones, delivering an intended network capacity of 12GW. The leading project of NSW’s rollout is the Central West Orana REZ, which has already garnered $40 million in state funding by June 2020.

The five NSW REZs are:

1. Central-West Orana (Dubbo)

The first REZ to be developed in NSW will be the CentralWest Orana pilot REZ, which is set to unlock 3,000MW of generation by the mid-2020s – enough to power 1.4 million homes. Concurrent upgrades of Central-West Orana transmission infrastructure will allow new generators to export electricity to the rest of the network. AEMO’s report card of the Central-West Orana REZ notes its invaluable proximity to the Sydney load centre. AEMO graded its solar and wind resources as high and moderate respectively, also noting opportunities for pumped hydro and battery storage.

2. New England (Armidale)

The NSW Government has locked in $78.9 million to develop the New England REZ, intended to deliver up to 8,000MW of transmission capacity. Registration of interest for generation, storage and network projects for the New England REZ closed in late July. AEMO’s report card entry for New England noted its moderate to good solar and wind resources, its proximity to the Queensland border as well as opportunities for largescale storage via batteries and pumped hydro.

3. South-West (Hay)

Early planning for the South-West REZ suggests it will be located around the town of Hay. Of note, this REZ is proximate to EnergyConnect, a proposed interconnector that could importantly link the NSW and SA markets. While AEMO found that there are good solar resources in this area, extensive transmission upgrades are required for new generation to reach the load centre of Sydney.

4. Hunter-Central Coast

The NSW government selected the Hunter-Central Coast region as a future REZ despite it not being a candidate ever suggested in AEMO’s 2020 Integrated System Plan.In 2020, NSW Energy and Environment Minister, Matt Kean, explained that, “The Hunter has been at the heart and soul of our energy industry for generations”.Mr Kean further noted that new generation could make use of the existing transmission infrastructure set up by previous generators, such as the soon-to-be-closed Liddell Power Plant.

5. Illawarra

The NSW Government’s selection of Illawarra as a planned REZ is recognition of its growing hydrogen industry. Indeed, Labor Member for Wollongong, Paul Scully, and NSW Greens Energy Spokesperson, David Shoebridge, have both raised the valuable application of hydrogen in essential industrial processes such as steel making.

South Australia

While AEMO did release its analysis of South Australian candidate REZs, there has been minimal announcements on the project from state government authorities.

According to AEMO, South Australia has already been a net exporter of energy to Victoria for the last two years, driven by the state’s early uptake of large-scale renewable projects as well as the recent decline of coal-fired generation in Victoria. In a 2018 discussion paper on AEMO’s ISP, South Australian

Minister for Energy and Mining, Dan van Holst Pellekaan, stressed his commitment to address ongoing congestion issues faced by existing renewable generators of his state.

Mr van Holst Pellekaan called for further involvement of generators in network decision-making, arguing that involving generators in conversations around transmission upgrades will “reduce the risk of overinvestment in transmission networks”.

While state response to the REZ program has been muted, South Australia is still well on its way to reaching net 100 per cent
renewable power by 2030.

Projects like EnergyConnect, a proposed $1.5 billion interconnector project with New South Wales, speak to South Australia’s ongoing commitment to bolster its transmission network for the future.


While AEMO has identified three candidate Renewable Energy Zones in Tasmania, namely the North West, North East and Midlands REZs, state government authorities are currently in a period of community consultation, and have emphasised that development of Tasmanian REZs “will be complex and take many years”.

All three of Tasmania’s candidate REZs have good to excellent grade wind resources, with the Midlands REZ also offering good pumped hydro potential.

Although Tasmania has been a net exporter of electricity since 2017, and hasn’t yet announced any REZ funding to boost its existing renewables, the state could become even more influential in the future – Tasmanian wind farms have the potential to support the national electricity market during the down time of mainland generators.

The gold standard

Over the next 20 years, AEMO prescribes a 200 per cent increase in distributed energy resources (DER), such as rooftop solar, to cover at least 13-22 per cent of total consumption.

According to AEMO, the gold standard in energy generation of the future is a ‘highly diverse portfolio’ of energy sources, that takes us away from a centralised coal-fired generation system.

Achieving this diverse portfolio will require large-scale renewable projects and technologies, not to mention dramatic upgrade of
transmission infrastructure.


According to AEMO, each REZ project progresses through five stages of development, from initial concept through to final construction:

1. Concept (Identify and refine candidate REZ sites)
2. Architecture (Functional network design, identify actionable projects)
3. Configuration (Community engagement, land-use assessment, improved costing)
4. Detailed Design (Detailed engineering design, finalisation of funding)
5. Construction and Commissioning (Agreements executed, financial close)


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1 Comment
  1. Mike Wilson 3 years ago

    Umm…what about Western Australia? It is still part of Australia last time I checked…and it is called a *National* Energy Market – even if WA is currently running a separate network

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