Australian Renewable Energy Agency (ARENA), on behalf of the Australian Government, has announced A$5m ($3.4m) in funding to TransGrid to undertake feasibility and planning works for the proposed Central-West Orana Renewable Energy Zone (REZ) in New South Wales (NSW).

The A$16.2m ($11m) study aims to assess the technical and commercial options for the development of new high voltage transmission lines to enable Australia’s first coordinated Renewable Energy Zone (REZ).

Additionally, the funding will support a detailed scoping study to deliver a business case of the Central-West Orana REZ.

The business case will include a commercial model and cover viability considerations, local community, technical considerations and consumer considerations.

ARENA CEO Darren Miller said: “This study is expected to provide a pathway to achieve Australia’s first true Renewable Energy Zone and provide a blueprint for how others can be created in the future, helping to unlock investment in renewable energy projects, secure new regional jobs and cheaper, emission free energy.”

The project, which already received A$9m ($6.2m) from the NSW Government, is expected to add at least 3,000MW of electricity capacity to the system by the mid-2020s and will represent at least $4.5bn in private investment.

Construction on the project due to commence by 2022 end

Construction on the project is scheduled to commence at the end of 2022. It is expected to create 450 regional jobs.

Transgrid CEO Paul Italiano said: “We are pleased to be working closely with ARENA and the NSW Government to develop the first coordinated renewable energy zone, where new generation will be co-located with new transmission infrastructure in the state’s Central-West Orana region.

“Investment in the new infrastructure will enable renewable energy providers to connect to the grid and enable more affordable, reliable and clean energy for New South Wales customers.”

NSW Energy Minister Matt Kean said that the Energy Corporation of NSW will oversee the development of the REZ.

Last month, ARENA approved A$1.1m ($0.71m) in funding to APA Group (APA) to fund the construction of renewable methane production demonstration plant in Queensland.