Green lights for Australian energy transition

Will radical restructure plus Regional Energy Zones topple King Coal?

Australia’s poor reputation on clean energy could be history, with two game-changing initiatives: a restructured relationship between national and state governments to stimulate green investment, plus a rapid upsurge of renewable energy zones (REZs), combining green generation and storage in virtual power plants, on a scale which will directly replace coal installations.

Whereas energy initiatives were largely the responsibility of individual states until now, the new Capacity Investment Scheme (CSI) creates a national platform for attracting competitive Contracts for Difference (CfD) tenders for renewable energy generation, backed by grid-scale storage, that can be traded between states.

Greeted as ‘Australia’s biggest ever energy policy change’, it shifts almost all the cost risks of new green energy investments from local consumers to the national exchequer and taxpayers. The new collaborative relationship between state and nation governments is described as unprecedented, with the potential to supercharge investment in green energy and meet the government target of 82% renewables by 2030.

Initial projects underwritten by the scheme total 32GW, comprising 23GW of clean generation, plus 9GW of ‘dispatchable’ storage capacity i.e. available for import/export.

One of the first five government-backed renewable energy zones is the Central West Orana project in New South Wales (NSW) – a virtual power plant embracing wind and solar, distributed over 7,722 square miles, and producing 3GW of clean electricity: 25% of the state’s demand. It will also contribute to NSW’s aim of 2GW of storage by 2030.

NSW is also creating an Energy Security Corporation, to develop additional storage capacity to address shortfalls in renewable availability. And it is investing in a Transmission Acceleration Facility to speed the connection of REZs to the grid.