Queensland Exposure Draft of Energy (Renewable Transformation and Jobs) Bill 2023 Published

On 3 June 2023, the Queensland Government took the first steps to legislate on Queensland’s renewables targets by releasing a draft of the Energy (Renewable Transformation and Jobs) Bill 2023 (Draft Bill).

The Draft Bill aims to implement the Queensland Energy and Jobs Plan, which sets out Queensland’s commitments, frameworks and governance to increase the generation of renewable energy in Queensland and maintain employment.

Consultation closes on Friday, 30 June 2023.

Snapshot

The Draft Bill proposes to:

• legislate Queensland’s renewable energy targets being that the percentage electricity generated in Queensland from renewable energy sources will be:
  • 50% by 2030;
  • 70% by 2032; and
  • 80% by 2035;
• maintain public ownership of energy assets with the following targets:
  • • more than 50% for generation assets;
    • 100% for transmission and distribution assets; and
    • 100% for deep storage assets;
• require the Minister to make the ‘Queensland SuperGrid Infrastructure Blueprint’ to identify and plan significant electricity and infrastructure projects;
• facilitate identification and construction of priority transmission investments (PTIs), with powers for the Minster to direct Powerlink to construct those PTIs;
• allow the Minister to declare renewable energy zones, which will have streamlined processes for connection and access to transmission networks and cost recovery; and
• provide governance and advisory bodies to oversee the implementation, being the Queensland Energy System Advisory Board, Energy Industry Council (EIC) and the Queensland Renewable Energy Jobs Advocate (Advocate). The purpose of these bodies is to advise the Government about the effects of the infrastructure created under the Bill on workers and industries and monitor its effectiveness.

Key Issues

Queensland’s Targets and Workers

The Draft Bill proposes the following as Queensland’s legislated targets for electricity generated from renewable energy sources:

1. 50% in 2030;
2. 70% in 2032; and
3. 80% in 2035.

These targets are to be reviewed every five years, and the Minister is yet to decide upon the methodology used to calculate energy produced by renewable energy.

Key to the increases in renewable projects are the new wind and solar projects predicted to come online by the Queensland Government by 2035, feeding into the Queensland SuperGrid.

The Queensland SuperGrid Infrastructure Blueprint (Blueprint) was released late last year and is available here. The Minister is required to review the Blueprint by 31 May 2025 and at further intervals of 2 years.

The Draft Bill also proposes a Job Security Guarantee Fund aimed at ensuring that a sufficient number of workers are retained for the safe and reliable operation of coal-fired power stations and to provide funding for the EIC and the Advocate.

Workers will be funded to:

• undertake additional training or skills development;
• transfer between publicly owned energy corporations;
• extend their career, where eligible, to support Queensland’s transitioning energy system; and
• seek advice on career options.

The Department of Energy and Public Works is to annually report on the total funds held in the fund bank account, the payments made in that financial year and how those payments have contributed to achieving the purposes of the fund.

Infrastructure and Investment

The Draft Bill is intended to drive government and private investment in Queensland’s energy transition. Capacity in the grid is intended to be unlocked by Government-backed critical infrastructure (e.g. backbone transmission) and multi-day storage for energy security. This is intended to provide transition stability and attract private investors.

Public ownership

The Draft Bill outlines Government’s intention to maintain public ownership in the energy system – 100% of distribution and transmission, 100% of deep storage, and more than 50% of generation. This will be funded in a range of ways including through a $4.5 billion Queensland Renewable Energy and Hydrogen Jobs Fund and public and private sector investment, consisting of a mix of government ownership, government underpinning private sector investment through long-term offtake arrangements, and private investors. The Draft Bill requires the Minister to prepare an annual public ownership report about the progress made towards achieving the targets set out in the public ownership strategy.

There are some uncertainties around how “public ownership” will be determined which we expect will be set out in the public ownership strategy that is to be prepared by the Minister within 6 months after commencement. The definition of “deep storage” is left to be determined by Regulations, however, the Government has indicated that the 100% public ownership for deep storage assets is only intended to include the pending Borumba Dam and Pioneer Burdekin Pumped Hydro projects. “Public ownership” is very broadly defined to include ownership, directly or indirectly and whether wholly or partly of an asset. The Government has indicated that this definition will be refined through the consultation process.

Priority Transmission Investments

The Draft Bill creates a Priority Transmission Investment (PTI) framework, aimed at delivering the step-change investments needed for the transition. PTIs will not replace existing frameworks and processes but amends the current rules (the National Electricity Rules (NER) and National Electricity Laws (NEL)) to allow the State to identify and assess PTI projects and direct Powerlink to construct and recover its related costs.

Renewable Energy Zones

The Draft Bill would allow the declaration of Renewable Energy Zones (REZs). These are areas with high quality sources of renewable energy to be developed into energy infrastructure to lower costs and improve local community, environmental and cultural heritage outcomes. A declared REZ will include nominated sections of the transmission network with connections regulated under a REZ management plan. The REZ delivery body can streamline and coordinate multiple projects as well as restricting connections to assets to ensure its objectives are achieved.

The Queensland SuperGrid Infrastructure Blueprint indicates that these REZs are to be smaller declared zones within the Northern, Central and Southern Queensland Renewable Energy Zones (QREZ). Proposed REZs currently include the following:

• Far North Qld REZ: already includes Woree Substation (operations), Mt Emerald Wind Farm (operational), Kaban Green Power Hub (under construction) and Chlumbin Substation (operational);
• Banana Range REZ and Fitzroy REZ: 2 new projects planning in the Banana Range REZ and 3 new projects in the Fitzroy REZ;
• Darling Downs REZ: Tarong Power North Station (operational), Tarong Power Station (operational) Coopers Gab Wind Farm (operational), Halys Substation (operational), Wambo Wind Farm (proposed); and
• Southern Downs REZ: Future project.

Further REZs are to be announced by the Queensland Government, following a ministerial declaration and informed by Powerlink’s recommendations and stakeholder consultation.

Advisory bodies

The Draft Bill establishes several new advisory bodies to provide advice and assess Queensland’s progress towards achieving the renewable energy targets, being the Queensland Energy System Advisory Board and the Energy Industry Council. It also establishes the Queensland Renewable Energy Jobs Advocate, to be responsible for advising the Minister in relation to opportunities for employment and workforce development in the industry.

Next Steps

The Bill is currently only an exposure draft and is subject to consultation, review and drafting changes before a final draft is published. Consultation closes on Friday, 30 June 2023 and feedback can be submitted via this email address: energybill@epw.qld.gov.au or the online questionnaire.

The Queensland Government also released the Regional Energy Transformation Partnerships Framework together with the Draft Bill. The consultation is open until mid-2023 – no precise date has been published by the Government.

By Kathryn Pacey, Gerard Pike, Sienna McInnes-Smith, Solicitor and Andella Amin, Graduate.