On 16 November 2023 South Australia’s Hydrogen and Renewable Energy Bill 2023 (SA) (HRE Bill) received unanimous support of the Legislative Council, following earlier support of the Lower House.
The HRE Bill is now awaiting royal assent and will come into operation as the Hydrogen and Renewable Energy Act 2023 (SA) (HRE Act) on a day to be fixed by proclamation.
The HRE Act will provide Australia’s first comprehensive regulatory framework for the licencing of the lifecycle of hydrogen and renewable energy projects. It is viewed as a timely landmark initiative to secure significant investment required to exploit South Australia’s abundant wind and solar resources over the State’s lands and waters. The South Australian State Government quotes the current capital development investment for renewable energy projects in South Australia to be approximately $21 billion, and it predicts investment will only increase.
The HRE Act will establish a competitive tender process between applicant proponents over declared Release Areas of land and waters and will provide a co-ordinated regulatory regime for dealing with access, environmental impacts, and native title rights. It will require applicant proponents to engage at the outset in community and rights holder consultations to ensure that any future projects are developed in accordance with the social, economic and environmental needs of the region and the State.
The declaration of Release Areas is a cornerstone feature of the new legislation. The State Government has undertaken robust review including consultation with rights holders and other stakeholders to identify optimal areas in South Australia suitable for renewable projects. This review, along with the community consultation on the HRE Bill run by the State Government, has elevated, and embedded the considerations of regional community stakeholders, including the views of traditional owners and native title holders, into the preliminary design of future projects.
The HRE Act will provide for six types of licences, being:
- Associated Infrastructure Licence (AIL) – authorising the construction and operation of certain infrastructure, storage and transmission of renewable energy, and other associated incidental activities;
- Hydrogen Generation Licence (HGL) – authorising the construction and operation of a hydrogen generation facility, and generation of hydrogen for a commercial purpose;
- Renewable Energy Feasibility Licence (REFL) – authorising construction and operation of renewable energy infrastructure and exploration of a renewable energy resource within the licence area, to assess the feasibility of exploiting a renewable energy resource;
- Renewable Energy Infrastructure Licence (REIL) – authorising the construction and operation of renewable energy infrastructure such as wind turbines and solar panels, and the storge and transmission of renewable energy;
- Renewable Energy Research Licence (RERL) – authorising the research, testing and data collection for renewable energy technologies; and
- Special Enterprise Licence (SEL) – governing the establishment, development or expansion of hydrogen and renewable energy enterprises deemed to be of major significance to the South Australian economy.
The HRE Act will require that a native title agreement (which may include an Indigenous Land Use Agreement) must be in place prior to the grant of all licences, with the exception of a SEL, over any area comprising native title land or waters, to authorise the grant of licence. This requirement will also apply to the grant of any Renewable Energy Feasibility Permit over an area comprising native title land or waters.
The HRE Act will also establish a Hydrogen and Renewable Energy Fund (Fund) to be used for research into methods of engineering and practice to reduce environmental damage resulting from authorised operations under the HRE Act, protection and preservation of native title and Aboriginal heritage, funding of programs or achievement of outcomes prescribed by the regulations, costs of administering the Fund, and providing for any matter that will further the objects of the HRE Act.
Since our previous article of 15 June 2023 about the HRE Bill at that time, stakeholder feedback, public consultation and parliamentary debate has led to numerous amendments to the original draft HRE Bill. Key amendments incorporated into the future HRE Act include:
- compensation provisions to provide that native title holders who are entitled to receive compensation under the Native Title Act 1993 in respect of the grant of a licence under the HRE Act will receive compensation from the licensee;
- provisions for grant of a Renewable Energy Feasibility Permit (distinct from a REFL), which authorises the permit holder to undertake activity specified in the permit for assessing the feasibility of generating renewable energy from a renewable energy resource;
- various transitional provisions recognising and governing existing lawful approvals in respect of establishing and or operating renewable energy infrastructure, associated infrastructure or hydrogen generation facilities;
- provision for the Minister to increase or decrease the size of a licence area on application by a licensee or with the consent of the licensee;
- expansion of the definition of “owner” of land to include the holder of an aquaculture lease or aquaculture licence under the Aquaculture Act 2001; and
- provisions requiring licence holders under the HRE Act to pay compensation to persons holding authority under the Fisheries Management Act 2007 for any loss suffered by them in consequence of authorised operations that have materially diminished the rights of that person.
Regulations are expected to be released in due course providing further particulars for the operation of the HRE Act.
HWL Ebsworth has a dedicated energy and resources team. If you wish to discuss opportunities or understand how the HRE Act may affect you, please contact us.
This article was written by Kate Bickford, Partner and Teresa Parnis, Law Graduate.