Understanding the 2023 Queensland Renewable Energy Zone Roadmap

Questions still surround the framework and connection process 8 min read

Following on from our previous Insight, the Queensland Government has now released a draft Renewable Energy Zone Roadmap (REZ Roadmap) for consultation.

The REZ Roadmap:

• outlines the four-stage process to developing renewable energy zones (REZs) (which will be enabled in legislation through the draft Energy (Renewable Transformation and Jobs) Bill, scheduled for introduction to Parliament later this year)
• identifies 12 potential REZs across the Southern, Central, North and Far North Queensland regions and anticipated timing for their declarations
• provides some insight into how Queensland intends to facilitate the connection of an additional 22GW of wind and solar in the state by 2035.

The REZ Roadmap is open for consultation until 22 September 2023.

In this Insight we provide details on the focus questions and explain how to submit your feedback.

Key takeaways

• The Department of Energy and Public Works has released its draft REZ Roadmap. Submissions on the REZ Roadmap close on 22 September 2023.
• Twelve potential REZs have been identified across Southern (Woolooga, Darling Downs, Tarong, Western Downs and Southern Downs), Central (Isaac, Capricon, Calliope and Callide) and North and Far North Queensland (FNQ, Collinsville and Flinders). Additional REZs may be identified in future REZ Roadmap updates (expected to occur every two years). See below for details of when these REZs are intended to be declared/developed, noting three of the potential 12 REZs are already progressing under the existing National Electricity Rules, with the remaining nine in various stages of the 'planning' phase.
• The Queensland REZ framework is likely to be simpler than those in other states and, while the REZ Roadmap confirms that the REZ framework will largely be a generator-pays model (and gives an indication of the indicative REZ capacity and when the REZs are expected to be declared), the limited detail provided regarding the framework and connection process means investors will need to wait for further information to be published to have a clearer picture of the implications for planned projects and opportunities for new projects.
• Queensland Farmers' Federation, in partnership with the Queensland Government, has prepared the Queensland Renewable Energy Landholder Toolkit to assist and inform landholders as they engage with energy industry representatives regarding land access and development of renewable energy projects.

Who in your organisation needs to know about this?

The Queensland Energy and Jobs Plan (including the associated REZ framework) will impact Queensland significantly. In particular, those investing or doing business in the state, along with board members and business development teams in organisations involved in developing and delivering energy projects, should familiarise themselves with the draft REZ Roadmap.

The proposed REZs and anticipated timing for REZ declarations

The 12 proposed REZs are separated into four phases; with the 'in-flight' REZs currently underway and the others expected to take flight from late 2023-onwards.

Whilst the REZ Roadmap indicates that the in-flight REZs may be converted to a declared REZ at a later date, it does not provide any detail regarding timing or circumstances which will contribute towards this happening.

Phase 1, 2 and 3 REZs will be developed in accordance with the following four-stage process (which will be enabled in legislation through the draft Energy (Renewable Transformation and Jobs) Bill, scheduled for introduction in Parliament later this year): planning, declaration, construction, and operation and commissioned.

Powerlink has been nominated as the delivery body responsible for the REZs.

Refer to our previous Insight for further details regarding the proposed REZ scheme.

Developer considerations

As noted in that Insight, there are a number of details still to be revealed about the proposed REZ framework, including how:

• REZ participants will be identified;
• the proposed framework will balance the need for investor certainty regarding the connection process, connection costs and timing of project delivery with the proposed flexibility in the REZ framework, and how to coordinate this with the timing of transmission network investment decisions so as to mitigate the risk of inefficient investment of public funds; and
• Powerlink will streamline and coordinate the connection of multiple REZ participants with the delivery of the REZ transmission infrastructure.

Similar to the approach taken in other states, the REZ Roadmap indicates that, to connect into a REZ, developers will need to meet predetermined criteria relating to their ability to demonstrate good community engagement, social licence to operate, environmental, commercial and technical viability, developer approval status and a proven track record of long-term ownership and operation of projects.

When approaching landholders and neighbouring properties regarding land access or land acquisition, renewable energy developers should also be aware of the Queensland Renewable Energy Landholder Toolkit which was recently released by the Queensland Farmers' Federation and the SuperGrid Landholder Payment Framework recently released by Powerlink.

Developers should also be aware that the Queensland Government intends to release a guide for developers later this year which will provide guidance as to what the Queensland Government considers is best practice for community engagement.

Renewable energy projects both within and outside of a REZ will still be subject to the usual planning and assessment processes required by all levels of government. The REZ Roadmap also indicates that individual project development approval conditions will impose statutory conditions relating to facility decommissioning or refurbishment.

Actions you can take now

• Private market participants that will be impacted by the REZ Roadmap should familiarise themselves with the draft REZ Roadmap and make submissions via email by no later than Friday 22 September 2023. Feedback is to be focused on the following questions:
  
  • What should the strategic and detailed REZ Readiness Assessments (designed to assess the regional and local opportunities and impacts of REZ developments) focus on to maximise local opportunities and manage impacts from REZ development?
  • How should Regional Energy Reference Groups be established and what role should they play in setting local investment priorities and shaping REZ outcomes?
  • Should there be a coordinated scheme in place to invest in local priorities to leave a positive legacy for REZ communities and how should this operate?
  • What else needs to be considered for REZ development in Queensland?
• Market participants should continue to monitor the Queensland Government's activity in respect of the energy transition, including the additional details and documents scheduled to be published in the coming months.

Please contact any of the people below if you need advice or require more information about the Plan and what it means for your business.