Tasmania’s Renewable Energy Zones

Powering a Sustainable Future and Driving Economic Growth

Tasmania stands at a pivotal juncture in its history, uniquely positioned within Australia as a near 100% renewable electricity generator, primarily leveraging its abundant hydroelectric resources, complemented by an expanding wind energy sector.

This remarkable achievement forms a robust foundation for an ambitious and transformative energy strategy: the establishment and strategic deployment of Renewable Energy Zones (REZs) across the state.

These REZs represent far more than mere geographic designations; they embody a significant opportunity to leverage Tasmania’s existing clean energy surplus into a powerful engine for economic growth, job creation, and a crucial contribution to Australia's national decarbonisation imperatives.

However, effectively capitalising on this potential necessitates meticulous strategic planning, substantial and timely infrastructure investment, and the establishment of enduring policy certainty to attract and sustain development.

Understanding Renewable Energy Zones

At their core, REZs are specifically identified geographic areas recognised for their exceptional potential for renewable energy generation. Within these designated zones, governmental bodies and regulatory authorities proactively work to streamline the often complex planning and approval processes, strategically coordinate vital investments in essential transmission infrastructure, and implement targeted incentives designed to foster collaborative partnerships between government, industry, and local communities.

The overarching objective is to significantly simplify and accelerate the process of bringing new renewable energy projects online in locations strategically chosen for their resource availability and grid integration capabilities.

In Tasmania's pursuit of this vision, the North West region has emerged as the prime candidate for the state's inaugural REZ. This area boasts several key advantages, including existing and robust grid connections, consistently strong and reliable wind resources, and strategic proximity to the Bell Bay Industrial Precinct—a significant potential anchor for large-scale industrial energy consumers and green manufacturing initiatives.

The Strategic Importance of Tasmania’s REZ Strategy

1. Leveraging a Crucial Head Start in the Global Energy Transition

Tasmania’s well-established and dependable hydroelectric power system provides a significant stability advantage in a rapidly evolving energy landscape. This inherent stability allows it to offer crucial firming support for the variable output of intermittent renewable sources like wind power. By strategically integrating these complementary resources, Tasmania can evolve into a reliable exporter of not only clean electricity via the ambitious Marinus Link interconnector but also of valuable clean-fuel molecules such as green hydrogen and sustainable bio-methanol, positioning the state as a key player in the emerging green economy.

2. Strategic Alignment with Foundational National Infrastructure Initiatives

Transformative projects of national significance, such as the Marinus Link, a high-capacity subsea electricity interconnector to Victoria, and the visionary Battery of the Nation initiative, aimed at optimising Tasmania’s hydro resources for grid-scale energy storage, are intrinsically linked to the success of the REZ strategy.

These projects collectively create a significantly expanded and more accessible market for Tasmanian clean energy, extending its reach far beyond state borders. The REZ framework is carefully designed to ensure that renewable energy generation capacity grows in a coordinated and synchronised manner with the necessary transmission infrastructure upgrades, preventing bottlenecks and maximising efficiency.

3. Attracting Clean Industries and Fostering Sustainable Economic Diversification

REZs play a vital role in proactively attracting energy-intensive industrial users that have a fundamental need for consistent, reliable, and demonstrably clean power sources. This includes sectors such as data centres with significant energy demands, sustainable food processing facilities, the burgeoning battery manufacturing industry, and a wide range of zero-emissions manufacturing enterprises.

By strategically co-locating these industries within or near renewable energy generation hubs within the REZs, Tasmania can offer compelling advantages, including reduced energy costs, a significantly lower carbon footprint, and the potential for circular economy synergies.

Navigating the Challenges

Barriers to Realising the Full Potential

While the fundamental concept of REZs in Tasmania holds immense promise, the ultimate success hinges on meticulous and effective execution. Several key challenges must be proactively addressed to ensure the vision becomes a tangible reality:

• Transmission Capacity and Timelines: The completion and operationalisation of the Marinus Link interconnector are critical prerequisites for unlocking the full export potential of Tasmanian renewable energy. Delays or insufficient capacity would significantly hinder the ability to transmit large-scale renewable energy to mainland Australia.

  
  

• Workforce Development and Skills Gaps: The ambitious undertaking of developing and operating renewable energy projects and the associated transmission infrastructure will require a substantial and skilled workforce. Anticipating and addressing potential workforce shortages through targeted training and education programs is essential.

  
  

• Building and Maintaining Community Confidence: The proliferation of renewable energy infrastructure, particularly wind farms, can raise concerns within regional communities regarding visual impacts, noise, and land use. Meaningful and transparent community engagement, ensuring local voices are heard and addressed in the planning process, is crucial for building and maintaining public support.

  
  

• Coordinated Investment and Clear Policy Signals: Renewable energy project developers require clear and consistent signals regarding grid connection availability, streamlined permitting processes, and attractive investment incentives. A lack of coordination or uncertainty in these areas can deter investment and slow down project development timelines.

  
  

The Elephant in the room

Not everyone is on board with this thinking. Enironmental activist groups argue that this does little more than increase consumption. Other thinkers see this as part of the net zero folly.

Prioritising Actions

What Needs to Happen Next to Fully Activate REZ Potential

To fully unlock the transformative potential of Tasmania’s Renewable Energy Zones, a focused and coordinated effort across several key areas is essential:

1. Accelerating Enabling Infrastructure Development: Top priority must be given to fast-tracking the development and upgrading of critical infrastructure within designated REZ areas. This includes not only grid connections and transmission lines but also essential supporting infrastructure such as road upgrades to facilitate construction and operation, and the development of suitable workforce housing to accommodate the influx of skilled workers.

   
   

2. Implementing Incentives for Early Adopters: To de-risk investments and encourage the establishment of clean industries within REZs, targeted incentives are crucial. These could include strategic grants, attractive tax offsets, and the establishment of long-term power purchase agreements (PPAs) that provide revenue certainty for both renewable energy generators and industrial users.

   
   

3. Establishing Guaranteed Local Benefits and Shared Prosperity: To ensure that regional communities hosting REZ infrastructure directly benefit from these developments, a standardised and transparent community benefit model should be implemented. This model should encompass initiatives such as targeted training programs for local residents, prioritising local procurement of goods and services, and implementing robust environmental protection measures to safeguard the natural environment.

   
   

4. Enhancing Coordination and Policy Alignment: Effective coordination across all levels of government is paramount. State policy frameworks must be closely aligned with relevant federal funding streams and initiatives, such as the Capacity Investment Scheme and the Hydrogen Headstart program. Clear and predictable timeframes for policy implementation and regulatory approvals are also essential to provide certainty for investors and developers.

   
   

The Broader National Impact and Future Vision

Tasmania is exceptionally positioned to transcend its role as a regional clean energy leader and become a significant clean energy enabler for the entire Australian nation. Through strategic investment in REZs and effective regional coordination, Tasmania can anchor long-term and sustainable economic development in parts of the state that have historically experienced limited opportunities.

The transition to a clean energy future is not a distant prospect; it is already underway. The critical question now facing Tasmania is whether it will proactively shape this transformative period, capitalising on its unique advantages, or passively allow external forces to dictate its future.

The opportunity to solidify Tasmania’s position as a clean energy powerhouse is undeniably renewable. However, the window of opportunity to fully seize this moment and establish a lasting competitive advantage will not remain open indefinitely. 

Strategic action and decisive leadership are required now to ensure Tasmania fully realises its clean energy ambitions and delivers enduring benefits for its economy, its environment, and the nation as a whole.