Big battery shake up: A welcome change for renewable energy leases

24 May 2024

The NSW Land Registry Services (NSW LRS) has released this month its anticipated updated guidelines regarding the registration of ‘Renewable Energy Leases’ in respect of battery energy storage systems (BESS), confirming that the leasehold tenure of a BESS can now be treated as a lease of ‘premises’. This change aligns leasehold tenures for BESS projects with the existing NSW LRS guidelines for the leasing of wind and solar projects.

What does this mean for BESS projects?

This change enables developers of BESS projects to treat a lease of part land as a lease of premises, regardless of the term. The lease plan, being a registered plan of survey need only to define the ‘premises’ (being the BESS sites (as numbered and designated on the plan) together with associated easements/restrictions ‘to be created’); and will not constitute a ‘current plan’ within the meaning of section 7A Conveyancing Act 1919, thus negating the need for subdivision consent.

Previously in NSW, a lease of part land (for more than five years) would constitute a deemed subdivision of land, and would require:

  • the necessary preparation of a deposited plan of subdivision (for lease purposes), and
  • a subdivision certificate from the relevant consent authority,

both a protracted and costly process for any project, and requiring complex drafting workarounds in the document suite.

This now streamlines the NSW leasing structure, so BESS leases of part land become a registrable, bankable structure.

HWL Ebsworth has one of Australia’s leading renewable energy legal practices. The firm’s lawyers are recognised as holding market-leading expertise, having advised on over 70 wind, solar, BESS, pumped hydro and carbon capture projects. Our experts service clients in all phases of feasibility, development, construction, and operation. These phases feature and include (but are not limited to) the following with applicable areas of law:

  • Planning and environment – including permitting & development approvals;
  • Property acquisition – including options, purchase/sale, ground leases/licences, subleases, forestry rights, profits a prendre, easements and other access rights;
  • Property-related agreements – such as participation/neighbour agreements, land offset/environmental and land use agreements for the relevant project;
  • Development agreements – including all associated consultancy agreements, agreements for equipment for monitoring, grid studies and design and project management;
  • Grid connection – agreements, regulatory issues;
  • Construction – wind turbine supply and installation; grid connection works including substation construction;
  • Operation & Maintenance – operations and maintenance agreements and other services agreements; advice on issues and strategies for dealing including warranty matters;
  • Offtake arrangements – power purchase agreements, contracts for difference and derivatives contracts; electricity retailing;
  • Regulatory – all authorisations and requirements for wind energy facilities and their operation (including FIRB);
  • Finance – debt and equity finance agreements including project finance arrangements; and
  • Corporate & Tax – structuring and advisory for any project including its corporate, structuring for funding and investment; share purchase/sale or project sale, due diligence, governance and compliance.

This article was written by Kendra McKay, Partner.

Subscribe to HWL Ebsworth Publications and Events

HWL Ebsworth regularly publishes articles and newsletters to keep our clients up to date on the latest legal developments and what this means for your business.

To receive these updates via email, please complete the subscription form and indicate which areas of law you would like to receive information on.

Contact us