Drive the Golden Highway out past Dunedoo on a quiet Sunday and you’ll see the survey pegs before you see any turbines. Orange tape on fence posts, a contractor’s ute parked on a verge, a paddock with a easement corridor mown through the middle of it. That’s what a Renewable Energy Zone looks like in year four or five of construction: mostly still steel lattice and paperwork, not gigawatts. I did that loop on the bike back in autumn and it’s stuck with me since — the gap between the map in AEMO’s planning documents and the actual dirt is wider than the spruiking on either side of this debate usually admits.
Renewable Energy Zones are, at their core, a transmission planning concept before they’re anything else. AEMO’s Integrated System Plan identifies zones of the National Electricity Market where wind, solar and storage resources are good enough, and land is available enough, to justify building shared transmission infrastructure rather than leaving every generator to build its own spur line. New South Wales turned that concept into legislation with its Electricity Infrastructure Roadmap, declaring five zones — Central-West Orana, New England, South West, Hunter-Central Coast and the Illawarra — and set up EnergyCo NSW as the government body to plan and deliver the network works. Victoria, Queensland and other states have their own versions under different names. The idea is sound engineering. The execution is where things have got messy.
What a declared Renewable Energy Zone actually promises #
Let’s be careful with that number, because REZ capacity figures get thrown around loosely in press releases. A REZ’s declared network capacity — EnergyCo’s material for Central-West Orana has pointed to something in the order of 4.5 gigawatts of transmission capability for that zone — is a measure of power, in MW: how much the wires can carry at any given instant, fully loaded, on a good day. It is not a promise that 4.5 GW of wind and solar will be built, connected, and generating that amount continuously. Wind farms in that zone might run at a capacity factor in the mid-30s per cent; solar farms lower again, and only during daylight. The energy actually delivered over a year, in MWh, is a fraction of what the nameplate MW figure suggests to a reader skimming a media release.
That distinction matters because it’s exactly where REZ scepticism and REZ boosterism talk past each other. Boosters point to the declared MW capacity as a headline number. Sceptics point out that what’s financially committed, connected and actually generating today is much smaller. Both are using true numbers. They’re just different numbers.
The worked example: capacity on paper versus capacity in the ground #
Take Central-West Orana as the case study, since it’s the furthest along. The zone was declared with that roughly 4.5 GW transmission target in mind. Several large wind and solar projects have reached financial close or construction in and around the zone, including developments tied to companies like ACEN Australia‘s New England projects and other proponents working the corridor. But the backbone transmission line EnergyCo needs to actually move that power out — the network augmentation works — has been running behind the generation build, not ahead of it, which is the wrong order if you want new wind and solar farms to be able to export what they build rather than sit curtailed. This is the same structural problem AEMO flags in every Integrated System Plan cycle: transmission takes longer to plan, approve and construct than generation does, so REZs risk becoming stranded generation zones in the interim, with plant built and sitting on constrained or non-existent export capacity.
We’ve covered this specific bottleneck before in more detail — see our piece on NSW’s energy transition and the REZ rollout running late — and the position hasn’t materially improved since. If anything the timeline has stretched further, which is a polite way of saying it’s late.
Why the wires are the hard part, not the panels #
Solar farms and wind farms are, relatively speaking, quick to build once approvals are through — eighteen months to two years for a mid-size project isn’t unusual. Transmission lines carrying that power to load centres are a different beast: land access agreements with dozens or hundreds of individual landholders, environmental approvals, easement negotiations, and steel and labour markets that have been tight across the whole east coast because every REZ and every interstate interconnector is competing for the same transmission-grade steel, the same specialist crews. HumeLink in southern NSW and VNI West in western Victoria have both seen cost estimates blow out well past their original business cases — HumeLink’s has roughly doubled from Transgrid’s early figuring — and both have faced sustained opposition from landholders who don’t want 500kV towers marching across grazing country they didn’t choose to host.
For background on how these networks are owned, regulated and paid for, our explainer on transmission versus distribution: who owns the poles and wires is worth a read alongside this one.
The pushback isn’t just NIMBYism, and it isn’t all the same complaint #
It’s tempting for anyone who supports the transition to file landholder opposition under one basket — reflexive resistance to change. That’s lazy, and it’s not accurate. Farmers along the VNI West corridor in western Victoria have raised specific, technical objections about route selection, about whether underground cabling was genuinely costed as an alternative rather than dismissed early, and about compensation frameworks that many feel don’t reflect the actual burden of hosting infrastructure they’ll never draw power from directly. Community groups around Merotherie and Leadville in the Central-West Orana zone have made similar arguments about consultation quality, not just outcome. The Australian Energy Market Commission has been working through reforms to REZ access arrangements — including proposals around firm versus non-firm transmission access rights for generators connecting into these zones — precisely because the original access model has produced disputes over who gets priority when a REZ’s transmission capacity fills up faster than expected.
My own read, for what it’s worth: some of the community anger is genuinely about process, not outcome. EnergyCo and its interstate equivalents have improved consultation practice since the early complaints, but the initial rollout treated host communities more as a route-planning obstacle than as a stakeholder group with a legitimate claim on the benefits. That’s a governance failure as much as an engineering one, and it’s slowed delivery more than any technical constraint has.
Who actually pays, and how that interacts with the Capacity Investment Scheme #
REZ transmission works get funded largely through regulated revenue that flows back through transmission use-of-system charges, overseen by the AER, which means the cost ultimately lands on electricity bills across the connected network, not just in the REZ itself. That’s standard cost-sharing logic for shared infrastructure, but it’s politically awkward when a Sydney household is paying for wires it will never see near a wind farm it will never notice, to keep bills lower in the long run than the alternative of no new supply at all.
Layered on top of this is the federal Capacity Investment Scheme, which underwrites revenue for new generation and storage capacity through government-backed contracts for difference, largely aimed at projects connecting into these same REZs. The two policies are meant to work together — REZs provide the wires, the CIS provides the investment certainty for generators to fill them — but they’re run on different timelines by different bodies, and we’ve written before about the risk that the Capacity Investment Scheme is quietly picking winners among projects that happen to be transmission-ready when the tender rounds close, rather than the projects that are cheapest or best sited. If your generation gets a CIS contract but your REZ transmission line is two years behind schedule, you’ve got a very expensive asset sitting curtailed, and that cost eventually surfaces somewhere in the system too.
Where the timeline actually sits now #
None of the five NSW REZs are fully built out. Central-West Orana remains the furthest progressed, with generation connections happening in stages as network segments are energised rather than all at once. New England and the South West zones are earlier in their transmission construction cycles. Nationally, AEMO’s planning work continues to treat REZs as the backbone of the ISP’s optimal development path, and nothing in the market suggests the concept itself is wrong — the alternative, ad hoc point-to-point connection for every new wind or solar farm, would almost certainly cost more and take longer overall. The concept survives contact with reality. The delivery schedule hasn’t.
What would actually change the picture is faster transmission approval processes without gutting landholder consultation, better-resourced community benefit sharing so host regions see tangible upside rather than just towers, and closer sequencing between AEMO’s ISP updates and each state’s actual construction pipeline. None of that is exotic. It’s mostly project management and political will, which is often the harder engineering problem than anything involving conductors and towers.
For readers wanting the dispatch-side context on why this all matters minute to minute, our explainer on how the NEM dispatches power every five minutes is a useful companion piece — it’s the mechanism these zones are ultimately feeding into. AEMO’s own Integrated System Plan documentation and the AER’s network revenue determinations are the primary sources worth reading directly if you want the numbers behind the headlines rather than the headlines themselves.
I’ll be back out on that Golden Highway loop again before summer. Worth watching whether the tape on those fence posts has turned into steel by then.
— Anjali Rao, Grid & Storage Correspondent
Photo by American Public Power Association on Unsplash