Release of the Draft NSW Renewable Energy Action Plan

On 7 September 2012, the NSW Government released the Draft NSW Renewable Energy Action Plan (Draft Plan) confirming its commitment to the national target of 20% renewable energy by 2020 and setting actions to support the achievement of that target. The Draft Plan comes off the back of a Commonwealth Government report that predicted a major shakeup of Australia’s energy mix by 2030, with some renewable energies expected to cost less than brown coal and gas based technologies. The question that arises is whether the current and proposed NSW environmental and planning laws will help or hinder the development of renewable energies in the State.

On 31 July 2012, the Australian Government’s Bureau of Resources and Energy Economics released the Australian Energy Technology Assessment (Report) which provided the “most up-to-date cost estimates for 40 electricity generation technologies” in the Australian context.

An integral component of the Report is its accompanying model that was developed to generate levelised cost of electricity (LCOE) estimates by state, year and technology. This breakdown allows for cross-technology and over time comparisons. The LCOE reflects the price at which electricity needs to be generated in order for the electricity generation plant to break even. The model aims to assist users in identifying development opportunities in various States and Territories.

As a consequence of driving innovation and investment in clean energies by putting a carbon price and through the establishment of a $3.2 billion Australian Renewable Energy Agency and the $10 billion Clean Energy Finance Corporation, the Report predicts that some renewable energies, such as solar photovoltaic (PV) and onshore wind, will have the lowest LCOE by 2030.

According to forecasts by Bloomberg New Energy Finance (Bloomberg), there will be a $36 billion investment in renewable energies across Australia in the decade to 2020, with $18 billion invested in wind energy projects, $16 billion invested in large and small scale solar PV and $400 million in solar thermal technologies.

Actions to achieve the 20% target

To capitalise on this investment, and to support the national Renewable Energy Target of 20% renewable energy in NSW, the Draft Plan sets out 28 actions to:

  1. attract renewable energy investment and projects;
  2. build community support for renewable energy;
  3. attract and grow expertise in renewable energy technology; and
  4. contain costs for energy consumers through increased energy efficiency.

Despite the fact that, between 2010 and 2011, renewable energy from sources other than large scale hydroelectricity increased by 43%, the Draft Plan indicates that only 7.8% of the State’s energy was sourced from renewables in 2011. Further, although renewable energy projects that are currently under construction or that have planning approval will increase generation from renewable sources to 12,000 gigawatt hours (GWh), to achieve the 20% target further projects will need to be development in order to fill the 6,000 GWh shortfall by 2020. To address this void, the Government has identified:

  • wind energy as “the most economical form of large-scale renewable energy over the next decade”; and
  • solar as a great investment opportunity, with the planned construction of the largest solar PV project in the world.

While solar and wind resources are identified as the key players in the renewable energy race, they will also be supported by the development of bioenergy, geothermal, hybrids, hydro, wave and tidal resources, and energy enablers such as Smart Grids.

Slowing the flow of wind energy

Notwithstanding the role of wind energy in meeting the 2020 target, the Draft NSW Planning Guidelines: Wind Farms (Draft Guidelines) released by the NSW Department of Planning and Infrastructure in December 2011, if made, are likely to make the approval processes more complex, time consuming and costly for future State significant wind farm proposals. The Draft Guidelines have been dubbed as imposing the world’s strictest noise standards and will restrict wind turbines being located within 2km of residences unless the landowner’s consent is obtained or a Site Compatibility Certificate (SCC) is granted.

Although the Draft Guidelines are not quite as limiting as the 2011 amendments to the Victorian Planning Schemes, which banned the development of wind farms in certain areas and gave residents within 2km of wind proposals the power to veto such proposals, the requirement for landowner’s consent has the potential to delay or stymie wind proposals. If landowner's consent is not obtained, the proposal will need to pass the “Gateway” assessment before a development application may be lodged. This assessment process contemplates community consultation and a determination in respect of the impacts of the proposal having regard to a number of factors. Assuming a proposal passes the Gateway and obtains a SCC, it will then be assessed under Division 4.1 of Part 4 of the Environmental Planning and Assessment Act 1979 (NSW).

The extent of the impact of the Draft Guidelines on the development of wind farms in the State will likely depend on the density of the populations surrounding the proposal. For instance, the Draft Guidelines may have:

  • little effect on future proposals similar to the approved Silverton Wind Farm, which only had two residences within the 2km radius, and Woodlawn Wind Farm, which had zero residences within that zone; and
  • a significant impact on future proposals similar to the Gullen Range Wind Farm in the Southern Tablelands, which had 141 residences within a 3km radius.

Given the importance of wind energy to the delivery of the 20% target, close attention will need to be paid to the impact of the Draft Guidelines (if made) on wind farms proposals to ensure that their development is not unreasonably restricted in the lead up to 2020 and beyond. The Draft Plan has acknowledged the world class standards of Australia’s wind resources; now the NSW Government must ensure that these resources are strategically and appropriately exploited without succumbing to the voices of the few living within the vicinity of the proposals.

Turning up the heat on the future of solar energy

NSW is identified in the Draft Plan as having the largest installed capacity of solar PV panels in Australia. In addition to the development of the largest solar project in the world in NSW, initiatives by local councils will also assist the State in meeting the renewables target. For instance, the City of Sydney Council is rolling out the largest rooftop PV installation (1.25 megawatts) in Australia with systems being installed across 30 properties over the next 2 years. These systems are expected to generate roughly 12.5% of the electrical power needs of the council.

In addition to the uptake of the solar bonus scheme, another factor which has likely contributed to the success of rooftop PV installation in NSW is the provisions of the State Environmental Planning Policy (Infrastructure) 2007 (ISEPP).

In particular, the ISEPP provides that solar energy systems:

  • are permissible without development consent on any land carried out by or on the behalf of a public authority up to a capacity of 100 kilowatts (kW); and
  • are complying development on any land:
    • not being a heritage conservation area; and
    • not exceeding 100 kW if the land is in a residential zone.

Achieving the 20% target by 2020

To meet the renewable target, the NSW Government needs to ensure that initiatives are put in place to stimulate development of the renewable energy industry. While environmental, health and social impacts of the adoption of renewable energy developments must be considered, so to must the alternative of not embracing renewable energy.

Unnecessary bureaucracy and red tape in the assessment of wind farm or other renewable energy developments should be avoided to maximise the State’s ability to meet increasing energy demand with renewable resources.

Achievement of the 2020 target will also require whole of Government support and greater endorsement of the Draft Plan by key Government representatives. This would require a significant reset of the position of the Hon. Barry O’Farrell on renewable energy who has previously stated that, if he had his way, there wouldn’t be another wind farm developed in this State. It also requires consensus to be reached between the Minister for Planning and Infrastructure, the Hon. Brad Hazzard and the Minister for Energy and Resources, the Hon. Chris Hartcher, on the economic benefits of investment in renewable energy and the Government’s present intention to prepare regional growth plans for the State, which will necessarily impact on the location of renewable energy projects.

Australia has some of the best sun, wind, waves, hot rocks and bioenergy resources in the world. Whether we can harness these renewable energy sources to unlock the economic benefits that renewable energies presents (approximately 6,000 jobs and $20bn) requires the Government to move quickly to strike a sensible balance between competing industries – the agricultural/agribusiness industry, urban development, renewable energy sector, the coal industry and the emerging coal seam gas industry.