Australia’s future is set to be shaped by Renewable Energy Zones (REZ). REZs are the equivalent of modern-day power stations as they combine renewable energy infrastructure, including generators such as wind farms and solar; storage such as batteries and pumped hydro, and high voltage transmission infrastructure, to produce cleaner and more affordable energy for everyone.
Australian states are making REZs a priority throughout the country. The New South Wales, Victorian, Queensland and Tasmanian state governments have either declared or identified more than 25 REZs to be developed and delivered over the next 20 years.
REZs will enable large economies of scale to deliver cheap and reliable electricity for homes, businesses and industries. A purpose-built network will enable smooth integration of renewable energy projects making connection to the grid an easier process.
REZ – A one-stop shop for clean energy
According to Australian Renewable Report 2023 produced by MinterEllison, construction commenced on more than 5,000MW of new large-scale wind and solar farms – the highest level on record – in 2022. Likewise, investment in renewables projects and infrastructure (US$33bn) and M&A (US$17.4bn) in Australia, both soared to new records.
The federal government has also committed to spending $25 billion to boost clean energy, including upgrading grids, while the Future Fund chairman Greg Combet recently said that the $225 billion sovereign wealth fund is hunting for investments linked to the federal government’s 2050 net zero target which has seen its investment in one of the country’s biggest renewable energy generation asset players, Tilt Renewables.
REZs are not just about generating energy; they are about creating a sustainable future, stimulating local economies, and leading Australia’s renewable energy transformation. They will be critical to achieving Australia’s net zero targets, by delivering key improvements:
“We see renewable energy zones as an important energy transition for Australian businesses and Australians across the country,” said Rob Fields, MBB Executive Director.
MBB Group has a proud history of working with clients across the energy sector in the fields of strategy, development, delivery and operations. These four fields encompass pre-feasibility and feasibility of business case analysis: procurement and delivery methodology, manufacturing, construction and commissioning as well as operations and maintenance.
We develop tailored delivery models to execute REZ projects with precision and innovation, bringing to life efficient and sustainable energy solutions for Australia’s green future.
In NSW alone, there will be five REZs in Central-West Orana, South West, New England, Hunter through to the Central Coast and Illawarra.
The Central-West Orana REZ is the first to be produced, which is expected to be completed by 2025, and will power 1.4 million homes in the area.
Building REZs involves navigating significant challenges.
“First, you need to work with the communities to get them to understand what is happening and why,” Michael Posener, Director, said. “It will take time to build trust to build and operate a renewable energy zone.”
Added to that is these REZs will be built in urban development zones meaning visual, biodiversity and environmental impacts will need to be minimised to gain the community’s approval.
With regards to the role that governments will play, there will be a need for clear regulatory requirements for businesses to be able to understand and follow, along with a strong transaction and risk framework to encourage competition and innovation among market participants.
REZs will need to coordinate the connections of renewable energy projects concurrently to accelerate commissioning and enable benefits realisation of REZs as early as possible. This is a new challenge, however, with MBB’s knowledge of the operation of the transmission network and relationships with generation developers and stakeholders, we can smoothly facilitate this process for our clients.
REZs offer a critical pathway to meet ambitious climate targets while ensuring the economic feasibility of investments in renewable energy.
With an estimated 7.5% increase in real costs for transmission infrastructure within the national electricity market by 2030, it has become a pivotal time for states to invest in REZs. They will be critical to achieving Australia’s net zero targets and MBB want to partner with you to be part of the process to foster Australia into a new, cleaner and more renewable energy sector.
MBB works closely with the government, infrastructure planners, the construction industry, developers, private investors, generators and regulators to facilitate efficient energy transition. Our collaborative approach ensures the successful strategy, readiness planning and capability, development, delivery and operation of large-scale projects. These projects include, but are not limited to, Renewable Energy Zones (REZs), major transmission infrastructure and interconnectors, and renewable generator development.
MBB’s services across REZ and transmission projects
Transgrid – Project Energy Connect Project Energy Connect – MBB Group
Project value: $2.3b
MBB Group provided strategic, project, commercial, transaction and technical management services to Transgrid during the development and procurement phases for EnergyConnect. MBB was instrumental in the development of the overarching project management framework, project delivery strategy, procurement model and process and the EPC D&C contract. Our commercial and transaction advisory expertise supported Transgrid in establishing the commercial framework, procurement model.
EnergyCo NSW – New England Renewable Energy Zone (REZ)
Project value: TBC
EnergyCo NSW has engaged MBB to apply its experience in mega infrastructure projects to manage the New England REZ project through its readiness and development stage. Our team is providing project readiness, development and commercial services to the project, coordinating the project work streams across the program, managing strategic development of the project and the commercial, technical, generation interfaces with regulatory and assurance bodies for the project.
VicGrid Renewable Energy Transition Portfolio
Project value: TBC
VicGrid has engaged MBB to provide portfolio wide commercial and transaction advisory services across its project portfolio including the Western Renewables Link, Marinus Link and VNI West projects respectively. Our team have leveraged their experience working on similar large-scale energy and linear infrastructure projects to support the establishment of the portfolio function and project teams and management capability, lead the commercial function and project-specific commercial negotiation processes, lead the technical, commercial and corporate project due diligence reviews and support governance and approvals processes across the portfolio. The aim of this project was to ensure a response for the state of Victoria that addresses the need to move away from coal-fired generation to more sustainable sources of energy.
AEMO – Victoria to NSW Interconnector West
Project value: AU$3.3b
MBB provides strategic, commercial and transaction services to AEMO for VNI West and has since moved into the delivery of the development phase after having successfully procured advisory consultant support for AEMO and the project team. Our teams focus was support the project team with the market approach and manage the transaction process on behalf of the client.
TasNetworks, MLPL – Marinus Link
Project value: $3.5b
MBB has been engaged to provide strategic and commercial reviews of the procurement approach for major works packages for the Marinus Link.
MBB was initially engaged in July 2022 to provide an independent peer review of the procurement strategy, the transaction readiness of the project, and suggest input into the tender documentation development. Our focus was to assist the project team with their market approach and check that documentation dovetailed with the regulatory environment, lowering Marinus Link’s exposure to risk.
In 2023, following the release of two of the main works procurement package RFPs to market, Marinus Link reengaged MBB to provide commercial advisory support.
In part prompted by feedback from RfP participants, Marinus Link requested MBB undertake an independent reactive review of the project packaging approach. This reactive packaging review is currently underway.
Powerlink – Various Projects – Copperstring
Project value: $5b
MBB (iPLAN) provided independent peer review of the primary contractor’s submission for the Copperstring execution schedule, providing critical insight into executability, risks and exposure inherent within the project delivery schedule.
Central and Southern Queensland Projects
Project value: TBC
MBB (iPLAN) are developing the baseline schedules for both the Gladstone Reinforcement and Borumba projects. Through our project controls and execution experience we are providing support to Powerlink in maturing Gladstone Reinforcement project management, project controls and risk management plans and procedures. In this role we are aligning cost, work and estimating breakdown structures, in the lead up to the development of the pricing schedules for the primary works contract.
For further information on how we can help please contact:
Peter Jones
Executive Director – Southern Region
VIC / TAS / SA
peter.jones@mbbgroup.com.au
Rob Fields
Executive Director – Growth Services
Australia / Asia / Pacific
rob.fields@mbbgroup.com.au
Shane Chidgzey
Managing Director – iPLAN Consulting
Australia
shane@iplanconsulting.com.au
Richard Wilkinson
State Director
Victoria
richard.wilkinson@mbbgroup.com.au
This article is part of MBB’s Transition to Net Zero thought leadership series. To read previous articles follow the links below.
Integrated Systems Plan: An updated roadmap for Australia’s energy transition
Investing in the Future of Water in our Transition to Clean Energy
The Acceleration of Australia’s Energy Transition: Navigating this ‘Brave New World’ with MBB Group