“Firmed renewables are now the most cost-competitive form of new generation and cost less than the current wholesale electricity price,” state energy minister Matt Kean said while unveiling the NSW Electricity Strategy on the morning of the meeting of COAG state and federal energy ministers in Perth on Friday. (See second table below).

The first of three renewable energy zones (REZ) – the first in Australia – will be located in a region bordered by Tamworth to the east, Nyngan to the west and Orange to the south.

It will please the Australian Energy Market Operator, which has been promoting them as a key to its Integrated System Plan.

NSW says this first REZ will provide a model for at least two others it is planning for the state – one in the south west and the other in New England, no doubt to the delight of former Nationals leader Barnaby Joyce and his successor Michael McCormack, whose electorates they will cover.

Wind and solar developers are waiting to see how these REZs play out, as it may reduce development options in some areas, while herding them into others.

The NSW government said the REZs “do not stop the development of energy projects in other parts of the State”, such as the Hunter Valley and South East and Tablelands, but it also flagged that wind and solar developers may be asked to contribute to the cost of transmission under new regulations to be developed by the state government.

It was one of a number of initiatives announced in the strategy that will see increasing government intervention in the markets.

The others are a more ambitious energy savings target that will support technologies that reduce the consumption of electricity or gas from the wholesale market, and a demand reduction scheme that will support technologies like batteries that can shift demand away from peak periods.

NSW will also set its own energy security target which it says will give the market certainty about how much new electricity is needed to deliver a reliable energy system over the medium to long-term, and will serve as an additional framework over national reliability measures.

“The Target will be set at an amount that is enough capacity for NSW to handle heatwave conditions, plus an extra buffer of the two largest generating units in the State in case of unplanned outages,” the document says. The Target will serve as an additional framework that complements the existing national reliability measures.