Renewable energy zones

Renewable energy zones (REZs) are a key tool designed to unlock new renewable generation, and to promote efficient and coordinated investment in transmission infrastructure.

Australia's successful transition to a net-zero electricity system depends on generators of renewable energy being able to secure connection to electricity networks on a timely, affordable and reliable basis. Similarly, electricity networks themselves need to change to cater for a different world, where intermittent and geographically diverse sources of generation are replacing coal.

An important tool for managing this dual challenge is the development of REZs in the National Electricity Market (the NEM). REZs provide a means of coordinating, and co-locating, the construction of new generation and network infrastructure.

Each state has now announced initiatives to promote the development of REZs in their jurisdictions. As these processes to design and implement reforms continue, it will be crucial for sector participants to understand the opportunities emerging to participate in them (through consultation), and the resulting network infrastructure and associated generation projects themselves.

How we can help

Unrivalled depth of energy expertise

Allens is at the forefront of energy reform, regulation and electricity network projects across Australia, with a market-leading team of utility, electricity, infrastructure and project financing specialists  who regularly advise across all parts of the market, at all stages of the project lifecycle. Our team has a comprehensive understanding of the issues that are likely to arise in relation to generation, storage and network infrastructure projects across various state jurisdictions.

Direct experience with NSW REZ regulatory framework

We have direct experience with the recent Central-West Orana (CWO) REZ process and with the regulatory framework that governs REZ projects in NSW. Having advised the financiers to the winning bid, the underbidding consortium, and a separate equity investor on the CWO REZ, we have broad insights and perspectives that enable us to give our clients comprehensive advice. We leverage this experience when advising clients on REZ regulatory frameworks in other state jurisdictions.

Interfacing with state governments and public-private partnership (PPP) experience

Through our experience in delivering successful outcomes for the private and public sector on a wide range of major infrastructure and energy projects, we understand the legislative, regulatory and contractual framework and challenges, as well as the broader stakeholder environment in which all REZs are being developed and delivered. We understand working with and in front of state governments, and bring that lens to assisting our clients.

Allens has worked on successful PPPs since their inception in Australia, up to and including all recent transactions. We have been involved in some of the largest and most complex transactions in the market, demonstrating our knowledge of key stakeholders and ability to help bring such projects to completion. Our deep understanding of PPP transactions and the positions that can be achieved in the PPP market means we are well-placed to advise on hybrid PPP models being adopted to procure the development of REZ infrastructure.

Experience

Central-West Orana (CWO) REZ

Advised the financiers to the winning bidder and another shortlisted consortium on their bids to design, construct, finance, operate and maintain new transmission network infrastructure within the CWO REZ. The CWO REZ is unique and a first-of-its-kind transaction. It is proposed to be procured using a hybrid regulated asset base and PPP model. We are also advising a number of generators on proposed connection to the CWO REZ.

Transgrid New England REZ

Acted for Lumea (Transgrid) on its proposal to develop approximately 1,400MW of transmission assets in the New England REZ under the current National Electricity Rules arrangements.

The world's most powerful battery

Advised on the procurement of the Waratah Super Battery project, the largest standby network battery in the Southern Hemisphere. Including advising on transaction documents and funding, as well as revenue determination, within a bespoke regulatory regime.

Transmission projects

Worked with:

  • Transgrid on its bid for the Western Victoria Transmission Network Project, including all Australian Energy Market Operator documents; and
  • Transgrid on the procurement and construction of Project EnergyConnect.

NSW network leases

Acted for NSW Treasury regarding the devising and disposal of the long-term network leases that underpin the Transgrid, Ausgrid and Endeavour Energy network businesses. Also advised NSW Treasury  on the impact of Electricity Infrastructure Investment Act REZ proposals on the network leases.

Victorian big battery

Acted for AEMO to procure additional system reliability assets to enable the state's transmission system to run at a higher rating. This involved a novel transmission support agreement to underwrite the project.

Connection agreements and renewable project experience

Advised on connection agreements in every NEM jurisdiction and in the Wholesale Electricity Market. Acted for sponsors regarding developing and connecting renewable generators, energy storage projects and customer loads across the NEM.

Transmission regulatory matters

Worked with Transgrid in relation to:

  • the application of the Australian Energy Regulator ring-fencing guidelines;
  • the impact of rule changes, including in relation to contestable connections, inertia and system strength services;
  • Transgrid’s contingent project for the Victorian–NSW interconnector upgrade; and
  • cost recovery and the Regulatory Investment Test for Transmission issues.

Electricity market regulatory reforms

Acted for the Australian Energy Market Commission / Energy Security Board on implementing a number of high-profile electricity reforms. This has involved integrating complex policy objectives, technical and commercial know-how and a detailed knowledge of the National Electricity Rules. Recent examples include the Transmission Planning and Investment Review, Retailer Reliability Obligation, Market Liquidity Obligation, and Coordination of Generation and Transmission Investment.