NSW to tighten rules on regional electricity generation projects

The NSW Department of Planning, Industry and Environment recently announced proposed changes to the planning rules for wind and solar projects on the outskirts of regional cities. The changes are intended to amend the State Environmental Planning Policy (Infrastructure) 2007 (Infrastructure SEPP) to protect certain regional cities that the NSW Government perceives to be at risk of encroachment by a proliferation of large wind and solar developments. 

The announcement comes soon after the publication of the NSW Government’s Energy from Waste Infrastructure Plan 2041 (EfW Plan), which seeks to restrict the location of new energy from waste electricity generation developments to a handful of strategic locations in regional NSW.

Together these announcements indicate a focus on ensuring that the rapid increase renewable and other alternative energy projects in NSW does not create or exacerbate land use conflicts – common with large industrial developments in rural areas. The objectives of the NSW Government’s Net Zero Plan, which aims to achieve net zero greenhouse gas emissions by 2050, will not be sought at all costs, or at least not without consideration of the impact that large industrial projects can have on metropolitan and regional communities.

These moves are further illustrations of the tension that governments face in managing the proliferation of renewable energy technologies, while also balancing interests of other sectors and constituencies. This has proven particularly difficult in an Australian context and could impact progress on greenhouse gas emissions reductions, which is likely to come under scrutiny at the upcoming “COP 26” international climate summit in Glasgow in November.

Participants in the wind, solar and energy from waste electricity generation industries should be aware of these recent developments, as they could affect many projects that are already in the pipeline in NSW.

Proposed changes to Infrastructure SEPP to limit wind and solar developments

The proposed changes will require consent authorities for utility-scale wind and solar developments (projects that export electricity to the grid) near certain regional cities to consider various additional mandatory matters before granting planning approval. 

The additional matters for consideration would apply to projects that are within 10 kilometres of the commercial centre, or within five kilometres of residential land in Albury, Armidale, Bathurst, Dubbo, Griffith, Orange, Tamworth and Wagga Wagga.

For development in these areas, a consent authority will need to consider whether: 

• the development is located to avoid land use conflicts with existing and approved uses of land;
  
  
• it is likely to have a significant impact on, or conflict with, land that would be required to support the growth of a regional city; and
  
  
• it would significantly affect the scenic quality and landscape character of a regional city, including the approaches to it.

Though large wind and solar projects close to regional cities will not be prohibited under the changes, the additional matters for consideration present additional hurdles for approval and could compromise existing projects in the development pipeline. 

The Department is accepting feedback on the proposed changes to the Infrastructure SEPP until 11 October 2021.

Energy from Waste Infrastructure Plan 2041

The EfW Plan “guides strategic planning for future thermal energy from waste facilities to ensure infrastructure is located in areas that best address the state’s waste management needs”.  It supports the Environment Protection Authority’s Energy From Waste Policy Statement, which was made in 2015 and updated earlier this year.

The EfW Plan identifies four “priority infrastructure areas” where “thermal energy from waste facilities must only be established, or permitted to operate”:

1. West Lithgow Precinct;
   
   
2. Parkes Special Activation Precinct;
   
   
3. Richmond Valley Regional Jobs Precinct; and
   
   
4. Southern Goulburn Mulwaree Precinct.  

Outside these areas, an energy from waste development will only be permitted at “facilities that use waste, or waste-derived, feedstock to replace less environmentally sound fuels (including coal or petroleum-based fuels) thermally treated (or approved to be thermally treated) at the site, and the energy produced from the waste is used predominantly to power the industrial and manufacturing processes on-site, rather than exporting that energy to the grid”.

The EfW Plan does not explain how it will be given effect through planning law. Energy from waste projects with a CIV above A$30 million are State Significant Development (SSD). In these cases, the environmental assessment requirements or “SEARs” will probably now contain a requirement to show how the development complies with the EfW Plan and the earlier Policy Statement. For projects of a smaller scale, or if the project is deemed not to be SSD (such as in the Parkes Special Activation Precinct – see clause 6(3) of Schedule 1 of the State Environmental Planning Policy (Activation Precincts) 2020), legislative amendments would be required to require that the development comply with the EfW Plan and Policy Statement.

The EfW Plan envisages “changes to planning instruments” coming in October 2021. As yet, there is no detail on what these changes could be, although a tightening of the permissive provisions in clauses 34 and 36 of the Infrastructure SEPP are likely being considered. 

Although the NSW Government has not invited comment on the EfW Plan, industry participants should consider writing to the Government in an attempt to influence the proposed changes to the planning instruments to give effect to the Plan.  In due course, the draft planning instrument changes should also be publicly exhibited for further comments.