The NSW government has declared the Illawarra Renewable Energy Zone, unlocking $43 billion in potential investment in clean energy in the region.
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The Illawarra is the last of five renewable energy zones across the state and Treasurer and minister for energy Matt Kean said the Illawarra was "ideal" to host the energy transition.
"The Illawarra is an ideal region to host a REZ, thanks to its existing energy, port and transport infrastructure, its highly skilled workforce and strong demand from existing industries to decarbonise," he said.
The Illawarra draft Renenwable Energy Zone was announced last year, with the public able to give feedback. Following the final declaration today, the Illawarra REZ becomes law and government infrastructure planner EnergyCo can begin the formal process of determining what projects go where.
An expressions of interest period in the zone last year returned $43 billion of projects, with the bulk of that, $35 billion, in offshore wind.
With the zone now declared, EnergyCo will auction the opportunity to build wind farms, solar arrays and batteries through a competitive tender process.
"This is a huge win for the Illawarra with projects registering their interest showing a potential to create more than 8300 jobs, not including the huge employment potential of offshore wind," Mr Kean said.
Following the draft declaration in December last year, some minor changes were made to the boundary of the zone, which stretches from Wollongong to Shellharbour, covering Dapto and Albion Park.
When first announced, the Illawarra was not included in the state's renewable energy zones, which included New England, Central-West Orana and the South West.
Wollongong MP Paul Scully, who moved the amendments to the legislation to include the Illawarra in the government's renewable energy zone plans, said it was a case of "better late than never".
"We should have been first off the block," he said.
"We were always well down the Coalition's list when it came to energy options, despite the fact that our history in steelmaking, in heavy industry and being able to build some of the generation capacity should have made us front and centre of building our renewable energy future."
The declaration removes one of the regulatory roadblocks to building offshore wind in the Illawarra. Last week, NSW Ports revealed their plans for a wind turbine assembly facility in Port Kembla's outer harbour.
Speaking at the launch of the plan, project director at wind farm builder Blue Float David Delamore said the company was preparing plans for 100 turbines 40 kilometres offshore.
"We are excited to bring forward proposals for what we believe to be possible," he said.
The final hurdle is the federal government assessing the Pacific Ocean region off the coast of the Illawarra as suitable for offshore wind. A decision is expected later in 2023.
"We are very keen for the zones to be declared as soon as possible," Mr Delamore said.
What does this mean for energy prices, jobs?
Were the full gamut of projects proposed in the expressions of interest phase to go ahead, there is the potential to create over 8300 jobs. However it is unlikely that all proposed projects would be successful in tendering.
The Illawarra would be the second largest renewable energy zone by investment and jobs, with only the Hunter-Central Coast region attracting more interest.
However, while other regions attracted projects in energy generation and storage, the Illawarra received proposals for energy usage or load projects, including green steel manufacturing, highlighting the region's potential as a test case for the decarbonisation of not only power generation, but carbon intensive industries.
Many of the projects proposed for the region would not be delivered until the mid-2020s, with little impact on power prices until then.
The first REZ to be declared was the Central-West Orana REZ in 2021, and proponents are preparing to begin construction of transmission lines this year.
"These projects have the potential to deliver thousands of jobs in the Illawarra as the region moves to a clean energy future," Mr Kean said.
Mr Scully said the sooner projects could move forward the faster it would impact household power bills.
"We know that solar and wind energy generation are among the cheapest forms of energy in the world at the moment. So the sooner we're able to get some of those projects underway, the better it will be for prices, lowering emissions and increasing jobs."
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