**This article will be updated as new developments occur **
Over the past three years, the phrase ‘renewable energy zone' has increasingly crept into policy papers, press releases and political talking points. Federal and state governments alike have spruiked their creation as a central plank of Australia's transition strategy.
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The idea is simple enough - cluster new generation, transmission and industry in designated hubs where wind, solar, hydro and storage resources overlap. The hope is this not only accelerates decarbonisation but also cuts costs and minimises disruption to the grid.
The background
Renewable energy zones – let's call them REZs - are the on-shore cousins of the Commonwealth's offshore wind "declared areas." They identify where strong wind and solar resources overlap with grid capacity, then funnel new generation and storage into those corridors in a coordinated way.
Instead of scattered projects fighting for congested connection points, REZs pre-plan transmission, run competitive access processes and stage grid upgrades.
New South Wales (NSW) led the way and now Victoria has now baked REZs into its long-term transmission plan> And other states aren't far behind in adapting the model to their systems. In practice, REZs are fast becoming the foundations of Australia's renewables rollout.
The Commonwealth has also leaned in. The 2022 Integrated System Plan (ISP) from the Australian Energy Market Operator (AEMO) framed REZs as the backbone of the future grid. The Albanese government linked federal transmission investment to REZ build-out through programs like Rewiring the Nation.
Environment minister Murray Watt told the Smart Energy Queensland Conference that Australia's environmental laws will soon feature new "go" and "no-go" zones to speed approvals for major projects, including renewables.
He said the reforms rest on "stronger environmental protections, quicker and more efficient approvals processes, and more transparency," shifting focus "from project-by-project development to effective planning for our environment and for sustainable development."
By "planning for and managing development impacts at a landscape or regional scale," Watt said, government can de-risk projects up front, protect the environment and give investors greater certainty, ensuring Australia meets its renewable energy targets.
How the model works
Think of it like a funnel:
- Government defines a REZ boundary and modelled hosting capacity.
- A transmission project and operator are progressed.
- Developers bid for "access rights" to connect.
- Winning projects still need normal state and federal planning or environmental approvals.
- Steel only goes in the ground when access rights, planning consent and transmission delivery line up.
Support from the corridors of power
Federal climate change and energy minister Chris Bowen has repeatedly pitched REZs as both an economic and climate opportunity, calling them "the most affordable path to deliver reliable energy in future."
At the state level NSW'energy minister Penny Sharpe describes them as "the largest energy infrastructure reform in a generation", pointing to billions in private investment and the ability to "put downward pressure on bills".
Critics counter with concerns about route selection, farmland impacts and rising delivery costs, especially for long transmission corridors. Cost scrutiny has sharpened as budgets and timetables firm up.
Zone by Zone – What's Actually Happening?
New South Wales (five REZs declared)
1. Central-West Orana (CWO)
The country's most advanced REZ CWO was the first REZ to gain full planning approval for its transmission network, with ACEREZ acting as the consortium operator. Access rights for 10 projects totalling 7.15 GW were awarded in May 2025.
Example projects: Valley of the Winds (ACEN), Uungula Wind Farm (Squadron Energy), Wellington North Solar (AGL), Dunedoo Solar.
Four projects have been granted access rights, totalling about 3.56 GW of wind, solar and more than 700 MW of batteries.
Example projects: Bullawah Wind (Neoen), Dinawan Energy Hub (Origin Energy and EnergyAustralia JV), Pottinger Energy Park (RES Australia), Yanco Delta Wind (ACEN).
An expression of interest for the network operator has been running since May 2025, with a target of 6–8 GW of capacity over the 2030s.
Example projects: Oven Mountain Pumped Hydro (OMPS Hydro), Sapphire Renewable Energy Hub (CWP/Partners Group), New England Solar and Battery (ACEN), plus more than a dozen other wind, solar, BESS and pumped-hydro proposals in planning.
Rather than building a new trunk line, Ausgrid will rebuild about 85 km of existing lines and add substations to unlock roughly 1 GW of capacity by 2028.
Example projects: Waratah Super Battery (850 MW / 1,680 MWh) – partly operational; Munmorah Solar Farm (Gentari/AME), and various industrial-load batteries under assessment.
Still in early-stage design, with Endeavour Energy holding a memorandum of understanding to co-develop battery and network solutions for up to 1 GW of urban renewables.
Example projects: Tallawarra B Power Station Battery (EnergyAustralia, 300 MW / 600 MWh), Port Kembla Hydrogen Hub (NSW Ports/Origin Energy concept).
Victoria (six REZs announced in the 2025 Victorian Transmission Plan)
VicGrid's plan centres on six on-shore REZs:
- South West
- Western
- Central Highlands
- Central North
- North West
- Gippsland, plus a Gippsland Shoreline REZ for offshore wind cable landings.
Combined, the state is banking on ~10 GW of new capacity by 2035 to reach its 95% renewables target. Western Victoria already hosts ~2.5 GW of large-scale wind and solar, with upgrades aiming to double those numbers.
Queensland (QREZ)
Powerlink and the state government are advancing a market-led framework grouping 12 potential zones across North/Far North, Central and Southern Queensland.
Three priority corridors - Northern, Central and Southern - are expected to unlock ~12.5 GW of capacity this decade. The Southern QREZ (Darling Downs) alone is scoped for about ~2-3 GW of solar and batteries.
South Australia (AEMO-defined REZs)
AEMO's ISP identifies multiple SA REZs, with the Mid-North and South-East zones carrying the largest projected build thanks to strong wind resources and new interconnection.
The South Australia–New South Wales section of Project EnergyConnect is now operational, providing additional transmission capacity and boosting headroom for new generation, while plans to expand the Mid-North REZ continue through the state's planning process.
Western Australia – Export hubs over classic REZs
WA is pursuing mega-projects aimed at export markets, rather than domestic supply.
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Western Green Energy Hub (WGEH) – proposed 70 GW of wind and solar near Eucla to produce up to 4 million tonnes of green hydrogen or ammonia a year. Environmental scoping approved; first production early 2030s.
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Australian Renewable Energy Hub (AREH) – 26 GW hybrid wind–solar project in the Pilbara, geared to hydrogen and ammonia exports. After a turbulent approval process, revised plans are before federal regulators. The consortium is in transition after bp's exit in July–Aug 2025. The revised approvals pathway remains live with the WA EPA.
Tasmania
Tasmania frames its island-wide grid as a "virtual REZ", already 90% hydro.
The Marinus Link (1.5 GW) will allow extra exports to Victoria.
Wind projects in the north-west could add another ~3 GW by 2035.
Headwinds and hurdles
While the opportunities are enormous, each state's rollout faces a familiar set of obstacles.
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Transmission delays and cost overruns are front of mind, with key lines such as NSW' Central-West Orana link and Victoria's Western Transmission Project grappling with land-access disputes and escalating budgets.
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Community resistance is another challenge. Farmers and regional residents in have objected to the construction of new high-voltage corridors and similar concerns are beginning to surface around Queensland's Southern QREZ.
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Planning bottlenecks add further complexity. Environmental assessments and federal approvals can stretch timelines by years, as seen with the Asian Renewable Energy Hub in Western Australia and the Gippsland offshore wind proposals, both of which have undergone lengthy revision processes.
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Grid integration also demands attention. High levels of renewable generation in South Australia and Queensland are already testing system strength and inertia, prompting significant investment in large-scale batteries and synchronous condensers to maintain reliabilty.
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Investment certainty remains a persistent hurdle with shifting market rules, evolving connection policies and ongoing global supply-chain constraints all have the potential to slow private capital and complicate offtake agreements, making the path from announcement to construction far from straightforward.
The Road ahead
Despite the hurdles, the REZ concept is no longer just a series of coloured blobs on a map.
NSW now has two zones with awarded access rights and live projects, Victoria has codified the zones guiding its 2040 grid build, Queensland is corralling 12 candidate zones, SA is leaning on AEMO-defined REZs with new interconnection, WA is pursuing export-scale hubs and Tasmania is formalising its first REZ alongside Marinus.
Timelines remain tight, transmission costs are rising and community social licence is critical but the delivery machinery is finally moving.
