On 12 May 2023, the South Australian Government announced a proposal for ‘world first’ hydrogen and renewable energy legislation.
The Hydrogen and Renewable Energy Bill 2023 (SA) (Bill) would, if passed, be the most significant State-level reform in the renewables sector in Australia, by streamlining regulatory processes throughout the life-span of renewable energy and hydrogen production projects. [1]
If the Bill is passed and becomes operational, we anticipate it will have substantial benefits for proponents of hydrogen generation and renewable energy projects in South Australia.
A draft of the Bill was released for public consultation on 12 May 2023 and will close on 26 June 2023. [2]
The draft Bill is the result of an initial round of public consultation undertaken by the South Australian Government in early 2023. [3]
Why was the Bill introduced?
The Bill aims to streamline the process for progressing renewable energy projects, promote economic benefits, reduce adverse impacts to the environment and Aboriginal cultural heritage and facilitate engagement with the wider community including First Nations peoples.
Renewable energy projects are currently complex to navigate under the existing legislative scheme due the range of legislation applicable during a renewable energy project’s lifetime.
By streamlining the currently complex regulatory scheme that applies to renewable energy and hydrogen generation projects, the South Australian Government aims to create economic opportunities and assist the State to meet its net zero carbon emissions objectives under State climate policies and the Climate Change and Greenhouse Emissions Reduction Act 2007 (SA) (which is also under review to update South Australia’s greenhouse emissions reduction targets). [4]
What are the key reforms proposed by the Bill?
The Bill proposes to make the following key reforms:
Government of South Australia, ‘South Australia to establish world-first Hydrogen Act’ (Online Media Release, 12 May 2023) (link here).
Government of South Australia, ‘Hydrogen and Renewable Energy Act – Draft Bill.
Government of South Australia, ‘YourSAy on the Hydrogen and Renewable Energy Act’.
Tom Koutsantonis, ‘South Australia to establish world-first Hydrogen Act’ (online media release, 12 May 2023) (link here).
A new licensing system would regulate certain ‘regulated activities’, which include various activities undertaken on South Australian land or coastal waters associated with hydrogen generation and renewable energy exploration, exploitation and infrastructure projects. Other regulated activities can be prescribed by regulations. [5]
The proposed licensing scheme provides regulatory oversight of hydrogen and renewable energy projects via an approvals regime and offence provisions.
The proposed licensing scheme would require a person undertaking a regulated activity to hold a licence. The Bill provides a comprehensive scheme for the application, assessment, management, term and renewal of licences.
The Bill also proposes a licence category known as a ‘special enterprise licence’, which is intended to ‘facilitate the establishment, development or expansion of enterprises comprising regulated activities of major significance to the economy of [South Australia] by allowing greater security of tenure and access to land’. [6] The special enterprise licensing scheme involves ratification of agreements between proponents and the State Government by the Governor of South Australia that would largely regulate the special enterprise, with the ability for proponents to obtain exemptions or modifications from the operation of the legislation, in certain circumstances. [7]
Bill, section 9.
Bill, Division 2, Subdivision 5.
Bill, sections 22 - 23.
The Bill will regulate access and acquisition of land by licensees, establish a scheme for hearing of objections to land access by landowners, require licensees to acquire land and pay compensation to landowners in certain circumstances and repeal existing provisions that regulate licences to operate wind farm operations under the Pastoral Land Management and Conservation Act 1989 (SA), to provide a single land access regime for renewable energy projects proposed on pastoral land. [8]
Bill Part 4.
The Bill creates a comprehensive environmental impact assessment regime that would allow impacts of authorised operations conducted under a licence to be assessed under a specialised regime that is broadly similar to the impact assessed development and Environmental Impact Statement regime that applies under the Planning, Development and Infrastructure Act 2016 (SA) (PDI Act).
Specifically, the Bill would require licensees to prepare an Environmental Impact Report, a Statement of Environmental Objectives and a scoping report, which will each be subject to public consultation, approval and periodic review.
First Nations peoples will also have rights to be consulted about licensed operations and the environmental assessment regime will expressly require assessment of the heritage, aesthetic, Aboriginal, social and cultural values of an area. [9]
Similar to operations conducted under mining legislation in South Australia, licensed operations will not be able to proceed until a Statement of Environmental Objectives and Operational Management Plan have been approved by the Minister.
Bill. Section 4(2), definition of ‘environment’.
A Hydrogen and Renewable Energy Fund would be established to promote research into reducing environmental damage and impairment from authorised operations, protect and preserve native title and Aboriginal cultural heritage and to fund various projects and achieve other outcomes that are consistent with the Bill’s objects, or which may be prescribed by future regulations.[10]
Bill, Part 5.
The Bill would require the responsible Minister to establish and maintain a public register, which would include details of all licence holders and licences granted under the legislation, which must be publicly available on a website maintained by the Minister. [11]
Bill, Part 9.
What are the potential outcomes of the Bill?
We anticipate that such comprehensive legislative reform proposed by the Bill will, if the Bill is passed and becomes operational, have substantial benefits for proponents of hydrogen generation and renewable energy projects in South Australia, by:
- streamlining the current patchwork of statutory environmental assessment processes that apply to hydrogen generation and renewable energy projects;
- streamlining and promoting access to and acquisition of land for hydrogen and renewable energy projects;
- generally reducing administrative and assessment costs and increasing certainty for the environmental and cultural heritage assessment of such projects.
The Bill represents the start of exciting opportunities for economic growth in the renewables and hydrogen generation space in South Australia.
Renewable energy reform around Australia
To date, the Commonwealth Government’s licensing framework for offshore wind projects in the Offshore Electricity Infrastructure Regulations 2022 (Cth) (OEI Regulations) made under the Offshore Energy Infrastructure Act 2021 (Cth) (OEI Act) is the most comparable legislative reform in Australia for the regulation of renewable energy projects. However, the OEI Act and OEI Regulations only apply to offshore renewable energy projects, do not regulate hydrogen production and do not incorporate a similarly comprehensive public consultation and environmental and cultural heritage assessment regime.
To date, other Australian States and Territories have generally adopted a piecemeal approach to legislative reforms in the hydrogen and renewable resources sector. South Australia’s proposed legislative reforms in the Bill are the most significant proposed to date in Australia.
This year, Queensland saw the introduction of the Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill 2023 (Qld Bill). [12] The Qld Bill proposes to bring hydrogen project approvals within the existing legislative scheme. Wind and solar projects remain with the ambit of the local government and Queensland State government assessments respectively. However, the Queensland Government has suggested that the Qld Bill is only the first phase of its ongoing legislative review of hydrogen and renewable energy projects.
New South Wales recently introduced its Electricity Infrastructure Investment Act 2020 and the Energy Legislation Amendment Act 2021, which introduced Renewable Energy Zones and incorporated the hydrogen industry into NSW’s scheme of energy legislation. [13]
While the Australian Capital Territory and Tasmania have made significant advancements towards achieving renewable energy targets, having both achieved 100 percent electricity from renewable resources in 2020, [14] neither have yet seen legislative reform of the kind proposed by the Bill in South Australia.
Victoria, Western Australia and the Northern Territory are similarly incorporating types of renewable energy into their existing legislative and policy framework for gas and electricity [15] and have State or Territory specific renewables targets or carbon credits or certificates. Like the rest of Australia, they are yet to introduce any bespoke legislation regulating renewable energy projects.
Gas Supply and Other Legislation (Hydrogen Industry Development) Amendment Bill 2023, Queensland Government Department of Energy and Public Works (link here).
NSW Government, ‘What’s involved in a Renewable Energy Zone?’ EnergyCo (link here).
Brett Mason, ‘The ACT is now running on 100 renewable electricity’, SBS News (link here); Natalie Marchant, ‘Tasmania is now powered entirely by renewable energy’, World Economic Forum (link here).
For example, see the Energy Legislation Amendment Bill 2021 (Vic); Electricity Corporations Act 2005 (WA); Northern Territory Renewable Hydrogen Strategy, Northern Territory Government (7 August 2020) (link here).
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