Draft NSW Energy Policy Framework

30/11/2023

The NSW Department of Planning and Environment (Department) has released its Draft Energy Policy Framework (Draft Framework) – which comprises a Draft Wind Energy Guideline, Transmission Guideline, Solar Energy Guideline, Benefit Sharing Guideline and Private Agreement Guideline (together with supporting technical supplements and tools).

While the Draft Framework aims to support the transition to renewable energy in NSW by improving the efficiency, transparency and consistency of planning approval pathways – it does propose certain specific limits, monetary figures and controls which may have the potential to constrain projects. It should be closely reviewed by proponents of any renewable energy and transmission projects in NSW that propose to submit an Environmental Impact Statement (EIS) in 2024 or beyond.

The last date for submissions to the Department in relation to the Draft Framework is Monday 18 December 2023.

Key Takeaways

the Draft Framework should be closely reviewed by proponents (and their technical advisers) of any renewable energy and transmission projects in NSW that propose to submit an Environmental Impact Statement (EIS) in 2024 or beyond;
while the Draft Framework aims to support the transition to renewable energy in NSW – it does propose certain specific limits and mechanisms which may have the potential to constrain projects which include (among other matters):
- controls to mitigate wind energy project impacts – including visual impact setbacks (2km from a 250m tall turbine), new noise criteria of 50dB(A) for passive recreation areas within National Parks, limit on visually dominate turbines and shadow flicker of no more than 30 hours per year;
- proponents of transmission project to design projects and/or implement mitigation measures to avoid fully visible towers within specified distances- including a setback for fully visible transmission towers – 380m from a tower 80m tall;
- decommissioning costs calculator for wind energy and solar project which we expect may be relied on used host landowners (and consent authorities) in negotiating decommissioning obligations (and associated financial assurance);
- identifies ‘suitable sites’ for wind energy and solar projects based on a range of criteria - while projects located outside those areas will not be ‘prohibited’ as such we anticipate that mapping will be relied on in support of objections and any appeals (including on site suitability and public interest grounds);
- requirement for proponents to developing benefit sharing models - using the following benefit sharing rates for the life of a project (indexed to CPI) - $850 per megawatt per annum for solar energy developments and $1050 per megawatt per annum for wind energy developments. This is in addition to any development contributions/compensation under other private agreements or voluntary planning agreements.
it would be prudent for proponents (and their technical advisers) to also review the Draft Framework to determine whether any guidance will cut across their existing (or proposed strategies) to deal with other ‘red flag’ type issues that we are seeing emerging for renewable energy and transmission projects in NSW – including biodiversity impacts, cumulative impacts, agricultural land use conflicts and visual impacts;
the Draft Framework does present certain opportunities for proponents including stating that the Minister will consider requests to declare wind energy or solar development to be Critical State Significant Infrastructure (CSSI) if it includes a significant energy storage system (for example, a delivery capacity of 750 megawatts or more). CSSI Projects get the benefit of significant streamlining and appeal rights protection in NSW.

The last date for submissions to the Department in relation to the Draft Framework is Monday 18 December 2023.

If you could like any assistance drafting a Submission in response to the Draft Framework, or to discuss the potential impacts of the Draft Framework on projects please contact us.

Draft Energy Policy Framework

The Draft Framework comprises the following guidelines for wind and solar energy generation and transmission infrastructure (and associated technical supplements, supporting documents and tools):

Draft Wind Energy Guideline;
Draft Transmission Guideline;
Draft Solar Energy Guideline;
Draft Benefit Sharing Guideline; and
Draft Private Agreement Guideline.

(together the Draft Guidelines)

We have provided a snapshot of the key changes proposed in the Draft Guidelines below.

Draft Wind Energy Guideline

The Draft Wind Energy Guideline revises the Department’s existing Wind Energy Guideline (2016) and provides updated guidance for onshore wind projects that have been declared State Significant Development (SSD).

The Draft Wind Energy Guideline also comprises (and should be read in conjunction with) the Department’s:

Draft Wind Landscape & Visual Impact Assessment Technical Supplement;
Draft Noise Impact Assessment Technical Supplement;
Draft Benefit Sharing Guideline;
Draft Private Agreement Guideline;
Draft Wind Decommissioning Calculator; and
Draft Visual Impact Assessment Tools.

Key proposed changes include:

Critical State Significant Infrastructure - the Minister will consider requests to declare wind energy development to be CSSI if it includes a significant energy storage system (for example, a delivery capacity of 750 megawatts or more). Projects that are declared CSSI will have the benefit of a more streamlined approval pathway under the EP&A Act (and other protections including in relation to appeal rights);
Site Selection - identifies desirable areas for wind energy development considering key commercial factors and high-level environmental constraints – and lists site-specific factors that need to be considered when selecting a site and finalising the design of a project. Proponents are required to undertake a constraint mapping exercise – and if certain constraints are not avoided there must be clear justification for this in the EIS;
Visual and Landscape Impact - requires the baseline character of the landscape to be determined through engagement with the community. Introduces new limits – including setbacks for wind turbines that are fully visible from people’s homes (for example 2km from a turbine 250m tall), and that projects should not have visually dominate turbines and shadow flicker of more than 30 hours per year.
Noise Impact - noise levels from wind energy projects should be minimised and must not exceed the higher of 35 dB(A) or the existing background noise level (LA90 (10 minute)) plus 5 dB(A). The noise assessment must consider any cumulative effects on affected residences, including noise from existing or proposed wind energy projects. Introduces a new noise limit which requires that noise levels must not exceed Leq 50 dB(A) at passive recreation areas within National Parks.
Birds and Bats - the site selection and biodiversity assessment process should consider impact avoidance to bat and bird populations – including selecting sites that have limited or minimal biodiversity value. Turbines should be sited at least 100 m (from blade tip to nearest canopy height) away from National Parks, state conservation areas and nature reserves. Applicants must adopt the hierarchy of impact management to avoid and minimise impacts on threatened bird and bat populations.
Decommissioning and Rehabilitation - land must be returned to pre-existing or agreed use if the project is decommissioned. If operations cease, redundant above-ground infrastructure should be removed within 18 months unless there is significant justification for retaining it. Decommissioning obligations should be reflected in the host agreement with the landholder (and the outcome-based objectives of decommissioning should be contained in the conditions of a development consent). Includes a new Decommissioning Calculator Tool to ensure host landowners are well informed about the likely costs.

Draft Solar Energy Guideline

The Draft Solar Energy Guideline will update the existing Large-Scale Solar Energy Guideline (2022) but is yet to be released. The Department has indicated that the proposed changes are outlined in the Department’s Guide to Energy Policy Framework.

The Draft Solar Energy Guideline will also comprise (and should be read in conjunction with) the Department’s:

Draft Solar Landscape & Visual Impact Assessment Technical Supplement;
Draft Benefit Sharing Guideline;
Draft Private Agreement Guideline;
Draft Wind Decommissioning Calculator; and
Draft Visual Impact Assessment Tools.

Key proposed changes include:

Critical State Significant Infrastructure - solar energy development will be considered by the Minister as CSSI if the project includes a significant energy storage system (the example given was a delivery capacity of 750MW or more);
Site Selection - identification of suitable locations for solar energy development;
Visual Impact - updated visual and landscape assessment methodology in line with the proposed approach for wind and transmission.
Decommissioning and Rehabilitation - provide a calculator for estimating decommissioning costs to ensure landholder are well informed about the likely costs.

Draft Transmission Guideline

The Draft Transmission Guideline will apply to all major transmission projects that are declared to be state significant infrastructure (SSI) or critical state significant infrastructure (CSSI) – and does not apply to standalone battery energy storage systems.

The Draft Solar Energy Guideline will also comprise (and should be read in conjunction with) the Department’s:

Draft Transmission Landscape & Visual Impact Assessment Technical Supplement; and
Draft Visual Impact Assessment Tools.

Key provisions include:

Route selection - transmission infrastructure should be co-located with existing infrastructure and/or maximise the use of already disturbed land (such as land already cleared of vegetation for other purposes) where possible to help maximise efficiency and reduce environmental and social impacts. Priority areas that may be given a higher weighting for the avoidance of impacts include areas of recognised high conservation value such as National Parks, World heritage properties and Ramsar wetlands. The route selection process should also consider the nature and magnitude of impacts as well as feedback from landowners and the local community for each specific project.
Visual and Landscape Impact - community should be consulted to gauge the landscape character of a project area. The supporting Technical supplement for landscape and visual impact assessment outlines more detailed thresholds for a range of tower sizes in both rural and urban settings. Proponents should design projects and/or implement mitigation measures to avoid fully visible towers within these distances- including a setback for fully visible transmission towers – 380m from a tower 80m tall;
Biodiversity - proponents are expected to demonstrate that they have applied the principles of avoidance, minimisation and mitigation in the selection of route options. When all attempts to apply these principles have been considered and addressed, the remaining unavoidable impacts can be offset by the purchase and/or retirement of biodiversity credits or payment to the Biodiversity Conservation Fund under the Biodiversity Offset Scheme.
Agricultural Land Use - assessment of impacts on agricultural land should focus on any operational impacts that may arise, such as temporarily restricted movements during construction and maintenance, disruption to irrigation operations, and disruptions to aerial agricultural operations. Proponents should consult with affected landowners to maximise opportunities for co-existence and to reduce impacts on agricultural activities.
Undergrounding – notes that it may be possible for transmission projects, or sections of transmission projects, to be located underground depending on the type of land, voltage, required capacity and length of the circuit. Burying high-voltage transmission lines may also be appropriate in certain settings such as in densely populated urban areas or near airports. However, the benefits of undergrounding need to be carefully weighed up and considered against the costs.

Draft Benefit Sharing Guideline

The Draft Benefit Sharing Guideline will apply to solar and wind energy projects that are declared SSD – and should be read in conjunction with the Draft Wind Energy Guideline and Draft Solar Energy Guideline referred to above.

Key provisions include:

Policy principles - benefit sharing initiatives should be designed and maintained in a standardized, collaborative, transparent and proportionate manner. The outcomes should be community focused and deliver a net-positive outcome;
Different Mechanisms - it should be recognized that benefit sharing mechanisms may differ depending on the proximity of beneficiaries to a project, the scale of benefits being distributed, and the administrative mechanisms required to distribute any project proceeds;
Implementation - any benefit sharing policy should be designed and implemented through an assessment process under the EP&A Act. This should require community engagement and the development of a proposed model for community benefit sharing (at a neighbourhood and local community level). The expected total value of the benefits should also be provided. Benefit sharing requirements should be implemented in any conditions of consent.
Review mechanism - benefit sharing models should be reviewed if changes are made to infrastructure contributions or the local government land rating system and this materially affects the development.
Benefit sharing rates - in developing their benefit sharing model, proponents are advised to use the following benefit sharing rates for the life of a project (indexed to CPI) to determine benefit sharing value: $850 per megawatt per annum for solar energy developments and $1050 per megawatt per annum for wind energy developments.

Private Agreement Guideline

The Draft Private Agreement Guideline is applicable to wind and solar energy generation projects declared SSD – and supersedes the information relating to private agreements in the 2022 Solar Guideline.

Key provisions include:

Circumstantial agreements: Landowner Host Agreements should be individually tailored to the landowner’s circumstances and impacts should be 'fully particularised' in an agreement. For example, any agreement should consider limitations on how the landowner may use their land, including adjoining land, for the duration of the project.
Confidentiality: Landowners should avoid signing confidentiality agreements unless the agreement also includes clauses to manage impacts from the development. Confidentiality clauses that prevent a landowner from raising concerns about consent breaches may be considered unfair.
Host considerations: The landowner host should consider a range of factors that span different project phases. These factors are provided, at length, in the Guideline and require impact predictions to be made. Importantly, private agreements should provide all parties with a clear understanding of decommissioning arrangements.
Templates: The Private Agreement Guideline provides a standardised template agreement for landowners and owners of adjacent land. The Template Agreement indicates that additional compensation may be required if material project delay or material design changes occur.

Next Steps

The last date for submissions to the Department in relation to the Draft Framework is Monday 18 December 2023.

If you could like any assistance drafting a Submission in response to the Draft Framework, or to discuss the potential impacts of the Draft Framework on projects please contact us.