The New South Wales government has re-booted and finessed its access rights program that will enable wind, solar and storage projects to reserve a spot on the grid, and help avoid the bottlenecks that have plagued many projects built over the last five years.
The access rights program is a central part of the state’s renewable infrastructure plan to replace the current fleet of ageing and polluting coal-fired generators with more than 12 gigawatts of renewables and storage within a decade.
The original idea was to award access rights to the state’s five renewable energy zones along with the underwriting agreements known as LTESAs (long term energy service agreements) that were being offered to new wind, solar and battery projects.
But the first allocation of access rights was pulled last November because the system was deemed to be too complex, and will now be offered separately to the LTESA program, and fast-tracked to enable the state to complete the design of the first REZ, the Central West Orana zone around Dubbo.
“Following the Energy Check Up, the NSW Government is streamlining the process for allocating access rights to new renewable energy projects in the Central-West Orana REZ,” state energy minister Penny Sharpe said in a statement emailed to RenewEconomy.
“We are working to ensure REZs are delivered on time and barriers to progress are removed.”
The first allocation will offer access rights for up to 4.5 GW of new capacity in the Central-West Orana zone. The government is keen to secure these so it can complete the design of the zone, reach financial close, and have the new infrastructure energised by 2028.
As part of the new arrangements, access rights will have a “sunset clause” that will set a use-by date that will prevent developers from “hoarding” access to the grid. The access rights will involve a fee that is to be decided after consultations that will begin this week.
Access rights for other REZs – in New England, the south-west, and in the Hunter and Illawarra – will still be offered together with the LTESAs in future auctions.
But the urgency to move on the first REZ in the central west zone – and understand who wants to build what and where – has caused the process to be split.
The NSW government has already completed three tenders for new renewables and storage, as it seeks to ensure enough capacity is ready to handle the closure of the country’s biggest coal generator, the 2.8 GW Eraring coal plant, currently planned for August next year.
An update from AEMO Services released on Monday says the state has now secured 5.7 GW of the 12 GW of wind and solar sought under the program – at least in commitments – and a further 600 MW of the 2,000 MW of long duration storage has also been secured, all in the form of eight hour battery projects.
The re-designed access rights program will not have an impact on the Eraring closure timing, although Sharpe has recently introduced new rules that could allow her to force the power station to stay open – at least partially – to ensure enough dispatchable capacity has been built to replace it.
The Central West Orana zone will initially have a capacity of 4.5 GW, but has also been expended to 6 GW. It is being supported by new transmission lines that will deliver that capacity to the major load centres in Sydney, Newcastle and Wollongong, and by new batteries such as the massive Waratah Super Battery.
A briefing released by the NSW government’s EnergyCo says projects that want to obtain initial access rights for the CWO REZ will be required to demonstrate compliance with a set of minimum criteria and will need tonominate a date by which their project will have met AEMO’s project commitment criteria.
“The current expectation is that these reforms will not alter tender processes for awarding access rights outside of the CWO REZ or beyond the initial tranche for CWO REZ,” the document says.
“This means, projects seeking both an access right and an LTESA in other declared Renewable Energy Zones with an access scheme would need to bid for both products simultaneously in a single competitive tender round.”
AEMO Services will begin consultations on the proposed access fee this week, while EnergyCo will begin consultation on project development agreements (EnergyCo) in February 2024.
