Australia’s Grid Transformation Takes Shape with First REZ Tower
A landmark moment in Australia’s energy transition has been marked in New South Wales with the raising of the first transmission tower in the nation’s inaugural Renewable Energy Zone (REZ). The 70-metre, 500 kilovolt (kV) tower stands as a concrete symbol of progress in the Central-West Orana REZ, a critical project for connecting vast new renewable energy sources to the grid as coal-fired power stations retire.
EnergyCo, the state-owned body overseeing the project, confirmed the milestone on April 1, 2026. The REZ, centred around the Dubbo and Dunedoo regions, is expected to unlock at least $25 billion in private investment for new wind and solar projects. Once operational from 2028, the zone will deliver enough clean energy to power more than two million homes, contributing to both grid reliability and downward pressure on electricity prices.
The construction, managed by network operator ACEREZ, is a significant undertaking. The first tower alone required 2,862 steel components and 6,252 bolts to assemble. The entire transmission project will span 240 kilometres, creating significant local employment, with a forecast of 1,850 direct construction jobs and around 930 ongoing operational roles.
Bolstering Stability with Big Batteries
As the grid incorporates more variable renewable energy, maintaining stability is a paramount concern for operators. Addressing this, NSW transmission company Transgrid recently announced a significant step to shore up the network’s strength. In late March 2026, Transgrid shortlisted nine battery energy storage projects, totalling a combined capacity of 2 GW, to provide essential system strength services.
These grid-forming batteries are crucial for maintaining a stable frequency and voltage—a role traditionally filled by the spinning turbines of coal and gas generators. By contracting with third-party owned batteries, Transgrid aims to strengthen the grid without costly network upgrades.
“By 2033, we are ultimately targeting 5 GW of stabilising services from third-party owned batteries to complement the proven grid-strengthening role played by synchronous condensers,” Transgrid Executive General Manager Network Jason Krstanoski said.
The first of these shortlisted batteries are expected to come online in the second half of 2026, providing a rapid-response solution to stability gaps as they emerge. This initiative runs parallel to academic efforts, such as a new $1.14 million research project at the University of Queensland, which is developing new methods for maintaining grid stability as the transition away from conventional generators accelerates.
The National Push for a Modern Grid
The developments in NSW are part of a broader national strategy to re-engineer Australia’s electricity system. AEMO’s Integrated System Plan (ISP) identifies REZs and new transmission, like the Victoria to NSW Interconnector (VNI) West, as critical components for a reliable and affordable energy future.
The build-out of REZs is designed to group new generation in areas with strong wind and solar resources and deliver it efficiently to consumers. The success of projects like the Central-West Orana REZ and the strategic deployment of advanced grid technologies like grid-forming batteries will be fundamental to ensuring Australia’s energy system remains secure and stable throughout its transition to a renewable-powered future.