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Dubbo
Case study

Central-West Orana REZ to deliver cleaner and stronger grid

CEFC commits $490m to net zero future via Rewiring the Nation Fund

CEFC debt finance  underpins EnergyCo work on the landmark Central-West Orana Renewable Energy Zone, with an innovative financing structure to reduce consumer costs while accelerating project delivery.

$490 million

CEFC commitment

4.5 GW

network capacity

~$240m

EnergyCo consumer benefits

The Central-West Orana REZ centred around Dubbo is a truly transformative project for Australia’s low emissions future and for the NSW economy. It will deliver a bigger, stronger, cleaner and more reliable energy grid fit for the 21st century. With an additional 4.5 GW in network capacity, it will also unlock new low cost solar and wind generation, backed up by battery storage.
Ian Learmonth
CEO, CEFC

Our investment

The CEFC finance to EnergyCo for the Central-West Orana REZ is the second investment made through the Rewiring the Nation Fund.

The commitment, made on concessional terms, includes an innovative financing structure to reduce consumer costs while accelerating project delivery.

EnergyCo estimates the finance agreement has the potential to deliver as much as a nominal $240 million in benefits to NSW electricity consumers in the form of lower project costs over the 20-year tenure of the loan.

The CEFC finance: 

  1. Enables EnergyCo to separately finance the capital expenditures related to land acquisition within the CWO-REZ, as well as the purchase of biodiversity offsets, at a government cost of funds. This will ease the overall financing task across the broader REZ for the Network Service Provider. In an added benefit for regional NSW, EnergyCo will use biodiversity offset credits to carry out conservation management and preservation activities in NSW.
  2. Includes the provision of CEFC concessional finance to EnergyCo on more favourable terms than otherwise available in the market, lowering the overall project financing cost to NSW electricity consumers. 

About the CEFC RTN Fund  

The CEFC RTN Fund  was created in 2023, with the allocation of an additional $19 billion in capital for the CEFC to invest in a range of projects essential to the achievement of our net zero emissions ambitions.

RTN Fund investments, made on behalf of the Australian Government, are intended to reduce the funding costs of grid transformation, as a means of accelerating the transition to at least 82 per cent renewables by 2030.

OUR IMPACT

Electricity and the race to net zero emissions

Our electricity sector is changing. As much as 46 per cent of coal generation is expected to exit our energy system by 2030, and 100 per cent by 2038. Over the same period, electricity demand is expected to double to support economic and population growth alongside widespread electrification.

Renewable energy is the cheapest, cleanest and fastest replacement for coal, delivered via a modernised centralised electricity grid.

Analysis from the Australian Energy Market Operator reinforces the urgent need for timely investment in projects to generate, store and share electricity to manage reliability risks driven by retiring coal plants, with AEMO noting that “project development and commissioning delays are impacting reliability”. 

AEMO has identified the CWO-REZ as a priority project in its Integrated System Plan for the National Energy Market. The first REZ to be declared in Australia, it is one of five designated REZs in NSW, alongside the New England, Hunter-Central Coast, South-West and Illawarra REZs.

 

We cannot over-state the importance of this investment in helping to close looming gaps in our energy system as coal-fired generators exit the power mix. This commitment demonstrates how the RTN Fund can play a key role in delivering the urgent investment in energy system development and commissioning that has been identified by AEMO.
Paul McCartney
CIO-RTN Fund, CEFC


Central-West Orana REZ
The Central-West Orana region will play an increasingly critical role in growing the NSW economy. 

EnergyCo expects the REZ to:

  • Unlock at least 4.5 gigawatts of new network capacity 
  • Enable renewable energy generators participating in the REZ to export to the grid
  • Bring up to $10 billion in private investment to the Central-West Orana region by 2030
  • Support some 5,000 construction jobs in the region.

READ OUR INSIGHT

Powering towards our net zero economy

Read our Investment Insight which provides insights into the operation of the RTN Fund and the role of the CEFC in addressing the financing barriers to Australia’s clean energy transition.

Read more
Last updated May 2024. New South Wales, Energy grid, Renewable energy
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