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NSW pumps $128m into community benefits for first green energy zone

Angela Macdonald-Smith
Angela Macdonald-SmithSenior resources writer

The NSW government will pump $128 million into communities hosting transmission lines and power plants for the state’s first Renewable Energy Zone as it seeks to prevent further delays to infrastructure deemed critical for the transition to low-carbon energy.

The funding will be distributed over the next four years in what NSW Energy Minister Penny Sharpe described as an initial “down-payment” to bring forward community and employment benefits from the Central-West Orana REZ.

The Dubbo region has abundant solar power capacity. Janie Barrett

She rejected suggestions from journalists the government was seeking to buy support for its controversial renewable energy rollout, which has divided communities impacted by major new power lines and large wind and solar generation projects needed to replace ageing coal power plants.

“It’s absolutely not about that,” Ms Sharpe said in Dubbo. “This is an opportunity for community legacy building, as there is this huge regional development opportunity through the Renewable Energy Zones.”

At roughly the same size as Wales – about 20,000 square kilometres – the zone will host up to 4.5 gigawatts of clean energy generation capacity in the first stage, due online in 2027-28, and up to 6GW by 2038 once the second stage is completed.


Costing more than $3 billion for the transmission, the Central-West Orana REZ is the first of at least five proposed REZs in NSW intended to support new clean energy generation and storage capacity of 14 GW by 2033. Originally intended to come online in 2025, it is now anticipated only in the second half of 2027, contributing to the squeeze on NSW’s power supplies that prompted the decision to extend the life of the Eraring coal power generator.

Public infrastructure upgrades, housing, First Nations initiatives and health programs could all receive support from the funding, which will be available immediately, ahead of the targeted start of construction of the transmission and renewable power projects in late 2024. The projects will be identified over the next six months.

‘Long-term prosperity’

Ms Sharpe described the transformation of the state’s electricity system as a “once-in-a-generation opportunity to foster long-term prosperity in our regional communities”, which are central to NSW’s energy infrastructure road map, the long-term plan for the state’s energy system that includes the REZ initiative.

She also called on renewable project proponents to up their game on community consultation to improve local acceptance for projects, and said misinformation about their impact and the volume of capacity had to be addressed because they needed to proceed.

“Be under no illusion we have to build these renewable energy projects: we have to do them in the best possible way. Managing the retirement of coal-fired power in a state that has 70 per cent coal-fired power, we have to keep the lights on, we have to keep prices down and the best way to do this is through the Renewable Energy Zones.”


The $128 million will come from NSW’s Transmission Acceleration Facility, which received an extra $800 million in the NSW budget last month and provides for benefits to flow to communities from the projects.

NSW EnergyCo, the body set up to deliver the REZs, is due within weeks to finalise the contracts with the preferred consortium to build the Central-West Orana transmission, comprising Endeavour Energy, Acciona and Cobra. It lodged the environmental impact statement for the zone in late September, attracting so much interest the public period for comments had to be extended,

Multiple companies are already lining up to build NSW’s second REZ, in New England, despite the even bigger social licence challenges expected to face that project.

James Hay, chief executive of EnergyCo, said in a recent interview that the strong interest in the New England REZ “says we’re doing something right, that people want to be here, to invest here”.

Angela Macdonald-Smith writes on the resources industry with a focus on energy, including gas, oil, electricity and renewables. Connect with Angela on Twitter. Email Angela at

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