Have your say on the draft NSW energy policy framework

To support the clean energy transition, draft guidelines for wind, solar, transmission, benefit-sharing and private agreements have been released by the NSW Department of Planning and Environment (DPE). This new policy package should be reviewed by existing and prospective applicants of clean energy and transmission projects in NSW.

Snapshot 

• Guidance to the community, industry, applicants and regulators has been updated for key aspects of the NSW energy framework, including wind and solar energy projects, transmission, benefit-sharing and private agreements.
• The draft guidelines seek to address key issues relating to the delivery of clean energy in NSW, including visual, noise and biodiversity impacts, transmission delivery and route selection, community contributions, and securing land for a project with agreements relating to impacts.
• While the draft guidelines are not yet finalised, the new policy framework is likely to have practical implications for applicants who are currently assessing the environmental impacts of proposed projects, including expanded and more onerous benchmarks for environmental assessment.
• Applicants of renewable energy projects should give careful consideration to the guidelines and accompanying technical supplements, and take the opportunity to make submissions in relation to the practical implications of the proposed framework.
• Submissions on the draft guidelines must be made to DPE via the NSW Planning Portal by Monday, 29 January 2024.
• We are completing a detailed analysis of the documents on exhibition and will provide a further update on the key changes for the clean energy sector, if implemented.

New guidance to deliver clean energy projects

In NSW, the transition toward a greater renewable energy contribution to the State grid is gathering momentum. The transition requires significant investment in new transmission infrastructure, renewable energy generation, and storage and firming infrastructure.

The Draft Energy Policy Framework (Draft Framework) aims to support this transition by providing clear guidance to applicants, investors, the community and regulators.

Currently on exhibition, the Draft Framework comprises the following draft guidelines:

• Draft Wind Energy Guideline (plus associated technical supplements);
• Draft Transmission Guideline (plus an associated technical supplement);
• Draft Benefit Sharing Guideline; and
• Draft Private Agreement Guideline.

These draft guidelines will apply to development applications for which Secretary’s environmental assessment requirements (SEARs) have already been issued if an environmental impact statement (EIS) is not submitted within six months from the date of finalisation of each guideline.

The Draft Framework also includes a new Solar Energy Guideline, which incorporates more limited updates to the existing Large-scale Solar Energy Guideline.

We explore each of the draft guidelines below.

Wind Energy Guideline 

The Draft Wind Energy Guideline contains revised guidance for onshore wind energy projects declared State significant development (SSD) and should be read in conjunction with the:

• Technical Supplement for Landscape and Visual Impact Assessment;
• Technical Supplement for Noise Assessment; and
• Wind Energy Decommissioning Calculator.

Together, these documents provide guidance to the community, industry, applicants and regulators about the planning framework for wind energy projects and the key planning considerations relevant to wind energy development.

In particular, a refreshed policy framework is provided for in the following key areas:

• Visual amenity: Applicants must consider landscape character and visual impacts early in the site selection and design process to minimise impacts and conflict, including by determining a landscape’s baseline character through community engagement. Projects should avoid visually dominate turbines and shadow flicker of more than 30 hours / year and adopt strategies and turbine treatments that reduce or manage moderate or high visual impacts.
• Noise and health: Applicants must consider cumulative noise impacts on residences and should keep noise below 35 dB(A) or the existing background noise level. Where noise exceedances are predicted, applicants must adopt mitigation strategies or enter into agreements with affected landowners.
• Aviation safety and lighting: Applicants must conduct an aviation impact assessment that considers existing and potential flight paths to ensure projects are designed to reduce aviation safety risks.
• Birds and bats: Applicants must identify at-risk bird and bat species, known habitats, flight paths and baseline population levels, and use that information to inform site selection, project design and turbine layout, and mitigation measures to reduce the likelihood of collisions. Turbines should be located 100 m from National Parks and other conservation areas.
• Traffic and transport: Applicants must assess cumulative impacts (including arising from other major developments) on local and classified networks, provide upgrades to facilitate the development where necessary, and ensure local councils and communities are informed about potential disruptions and construction scheduling.
• Infrastructure contributions, benefit sharing and private agreements: Benefit sharing is strongly supported via the Draft Benefit Sharing Guideline (discussed below) and private agreements can be entered into with reference to the Draft Private Agreement Guideline (discussed below). However, infrastructure contributions should be addressed through development consent conditions rather than local contribution mechanisms or planning agreements.
• Decommissioning and rehabilitation: Applicants may choose to cease operation of the wind energy project and decommission and rehabilitation the project site rather than refurbish wind turbines and infrastructure. Applicants should inform host landholders of the decommissioning plan. Land must be returned to pre-existing or agreed use by dismantling and removing all turbine components, above ground infrastructure and waste within 18 months.
• Waste management: Waste generation during project construction must be minimised and materials should be reusable and recyclable. Impacts on local waste management facilities must be minimised during construction, operation and decommissioning, and the recycling of turbine components prioritised.

Transmission Guideline

The Draft Transmission Guideline contains newly developed guidance for large scale transmission infrastructure projects declared as State significant infrastructure (SSI) or critical SSI (CSSI) and should also be read in conjunction with the Technical Supplement for Landscape and Visual Impact Assessment.

Together, the draft guideline and associated technical supplement provides guidance to applicants and consent authorities on (amongst other things) the key assessment issues that arise when selecting a route alignment and undertaking an environmental impact assessment.

Given the significant scale of transmission infrastructure projects, there are inherent challenges associated with impact minimisation strategies across the various land-use types.

In particular, a refreshed policy framework is provided for in the following key areas:

• Visual impacts: Applicants must carefully consider the visual effects of a transmission project on people’s views from the private and public domain. This includes visual impacts on dwelling entitlements. As transmission towers often contrast with the natural landscape in which they are situated, the route alignment must be designed in such a manner that avoids high visual impacts from public viewpoints and/or private receivers. The technical supplement includes tools that applicants must use to inform the assessment of impacts in this context.
• Landscape impacts: Landscape character assessments are particularly important for transmission infrastructure projects to understand the sensitivities of the surrounding area and to help determine the overall impact of a project on an area’s character and sense of place. Appendix A of the technical supplement provides a useful example landscape character assessment.
• Biodiversity: Impacts to biodiversity values from transmission infrastructure projects can be significant. Often, vast amounts of native vegetation will need to be cleared within easements to allow for major transmission connection points to pass through. While DPE acknowledges that complete impact avoidance is not feasible, there is an expectation for applicants to demonstrate that they applied the principles of avoidance, minimisation and mitigation in the selection of route options.

The draft guideline also identifies a range of other assessment issues for transmission infrastructure projects, including agricultural land use, ‘undergrounding’, bushfire risks, electric and magnetic fields, and aviation.

When referenced in SEARs, applicants must consider this draft guideline for visual impact assessment and prepare an EIS in accordance with the technical supplement.

Solar Energy Guideline

The Draft Solar Energy Guideline introduces minor updates to the existing guideline to align it with other parts of the Draft Framework.

Although the updated guideline has not been published in full, it is expected to provide a refreshed policy framework for the following key matters:

• Allow the Minister to declare solar energy development CSSI if it includes an energy storage system of 750 MW or more.
• Identify suitable locations for solar energy development along existing and planned transmission lines between renewable energy zones and energy markets.
• Repeal existing guidance on benefit sharing and private agreements, and replace them with the draft guidelines discussed below, including the proposed benefit sharing rate.
• Define dwelling and clarify assessment requirements for dwelling entitlements and reduce the reliance on photomontages to assess visual impacts.

This draft guideline should also be read in conjunction with the Solar Energy Decommissioning Calculator.

Benefit Sharing Guideline

The Draft Benefit Sharing Guideline will apply to solar and wind energy generation projects that are declared SSD, and should be read in conjunction with the new solar and wind energy guidelines discussed above.

The draft guideline provides that a benefit-sharing scheme tailored to State significant solar and wind energy projects is considered important because:

• while society benefits from the growth in renewables, the impacts of developments are most felt by regional communities;
• standard methods of collecting revenue from new developments are not always suitable for renewable energy projects; and
• renewable energy often generates lower levels of ongoing employment for host regional communities.

The draft guideline focuses on achieving a benefit sharing model through the statutory assessment process that is standard in practice, designed in partnership with local councils, transparent, informed by community consultation, proportionate to the level of change experienced, and delivers a net-positive outcome for local communities.

Notably, applicants are advised to use a benefit sharing rate over the life of the development (indexed to CPI) of:

• $850 / MW / annum for solar energy developments; and
• $1050 / MW / annum for wind energy developments.

Private Agreement Guideline

The Draft Private Agreement Guideline will apply to solar and wind energy generation projects that are declared SSD, and should be read in conjunction with the new solar and wind energy guidelines discussed above.

In particular, the draft guideline provides that:

• Agreements should be tailored to the landowner’s individual circumstances and the relevant project.
• The applicant should bear all reasonable costs associated with entering into the agreement.
• Agreements should not include perceived unfair clauses, such as confidentiality agreements that omit clauses to manage impacts from the development.
• Hosts should understand how the project owner or operator will manage the construction and decommissioning phases.
• Hosts and owners of adjacent land should have regard to the model clause template provided within the draft guideline for the drafting of private agreements.

Next steps 

The Draft Framework and related guidelines introduce a comprehensive refresh to the policy framework for wind, solar and transmission projects in NSW. Significantly, the proposed benchmarks are, in places, expanded and more onerous for applicants of renewable energy projects when compared to present environmental assessment processes.

New guidance on the assessment of visual, noise and other environmental impacts may have clear implications for applicants who are currently preparing an EIS for lodgement in 2024 and beyond.

Further, stated draft guidance may have present day implications for proposed projects. For example, the establishment of baseline expectations for benefit sharing contributions associated with wind and solar energy projects is likely to set new benchmarks for the industry.

Applicants of renewable energy projects should give careful consideration to the guidelines and accompanying technical supplements, and take the opportunity to make submissions in relation to the practical implications of the proposed framework.

Public submissions on the Draft Framework and related guidelines must be made to DPE via the NSW Planning Portal by Monday, 29 January 2024.

If you would like to explore what the policy framework will mean for your project, or if we can assist with a submission, please do not hesitate to get in touch.

By Peter Briggs, Partner, Tom Dougherty, Senior Associate, James Donaldson, Solicitor, and Andrew Mahler, Solicitor.

Note: This article has been updated to reflect the extended end date for the exhibition period.