The Australian Energy Regulator (AER) has today published a summary report on its remade revenue determination on the amounts payable to ACEREZ Partnership (ACEREZ) for the main Central-West Orana Renewable Energy Zone (CWO REZ) network project.
Following financial close for the project on 4 April 2025, ACEREZ submitted an adjustment proposal for the revenue determination to reflect the finalised contractual arrangements for the project. The proposal included:
- changes to the wording of some adjustment mechanisms to reflect updated processes for calculating adjustment amounts, and
- an update of the amount payable to ACEREZ to reflect adjustments applied at financial close and the resolution of Net Financial Impact Events.
We have found that the proposed adjustments were made in accordance with the approval process set out in contractual arrangements and the revenue determination, and remain consistent with the outcome of the competitive assessment process.
The summary report of the remade revenue determination includes the schedule of quarterly payments to be paid to ACEREZ over the first 5 years of the project (2025–29) of $1,511.9 million ($ nominal). It also sets out mechanisms to further adjust the amounts payable to ACEREZ over the project term.
The summary report sets out the ‘NER‑equivalent capital cost’ for the project of $5,526.1 million. This amount is calculated by EnergyCo (as the Infrastructure Planner) based on our determined development and construction capital costs.
The NER-equivalent capital cost is intended to be broadly equivalent to the costs published by the AER in revenue determinations under the National Electricity Rules and reflect the costs of the project to be recovered from NSW electricity customers. This recognises that significant other project costs in the determination, including for connection assets and system strength infrastructure, will be funded through access fees paid by generators and storage projects connecting to the CWO REZ network.
Background
The CWO REZ is approximately 20,000 square kilometres in central NSW, centred by Dubbo and Dunedoo. It is the first renewable energy zone to be developed under the NSW Government’s Electricity Infrastructure Roadmap (NSW Roadmap). The CWO REZ was declared by the NSW Minister for Energy and Environment under section 19(1) of the EII Act in November 2021.
The CWO REZ network project, initiated under the New South Wales (NSW) Electricity Infrastructure Investment Act (EII Act), provides for new network infrastructure to deliver 4.5 gigawatts of network capacity, to support up to 7.7 gigawatts of new generation from solar, wind and energy storage projects. The scope and timing of the CWO REZ network project was decided by the Energy Corporation of NSW (EnergyCo) as the Infrastructure Planner.
ACEREZ was selected by EnergyCo as the network operator following a competitive assessment process, and authorised by the NSW Consumer Trustee (AusEnergy Services Ltd - formally known as AEMO Services Limited) to undertake the project. ACEREZ will construct, own, control and operate the project for 35 years.
Completion of the CWO REZ network project and connection of foundation generators will be staged between 2028 and 2030.
On 4 June 2024, AEMO Services (as the NSW Consumer Trustee) under s. 31(1)(b) of the EII Act authorised ACEREZ as the network operator to develop, construct, own, control and operate the main CWO REZ network project. ACEREZ is a consortium comprising Cobra, Acciona and Endeavour Energy.
We have made our determination and published this summary report in accordance with the EII Act, the EII Regulation and our Revenue determination guideline for NSW contestable network projects.
Under the contestable framework, there are clearly defined roles for the different NSW Roadmap entities:
- EnergyCo, as the Infrastructure Planner, sets the scope and timing of network projects required to meet the NSW Roadmap objectives and undertakes a competitive assessment process to select a network operator for the project. It then recommends projects and network operators to undertake them to AusEnergy Services Ltd. The public version of the recommendation report from EnergyCo for the CWO REZ project can be found here.
- AusEnergy Services Ltd, as the NSW Consumer Trustee, reviews EnergyCo’s project recommendations and decides whether to authorise the recommended network operator and project. AusEnergy Services Ltd will authorise projects that it finds to be in the long-term interests of consumers and that are consistent with the Development Pathway set out in the Infrastructure Investment Objectives Report. The authorisation from AusEnergy Services Ltd for the CWO REZ network project can be found here.
- The AER is required to assess whether a competitive assessment process undertaken by EnergyCo was genuine and appropriate. If so, the AER must accept the costs for the project as prudent, efficient and reasonable.
Under the EII Act, ACEREZ is required to be paid by the Scheme Financial Vehicle (SFV) in accordance with our revenue determination. The SFV recovers these costs (and other NSW Roadmap costs) from NSW electricity distributors, who in turn recover them from NSW electricity customers via their retail bills.