Hydrogen and Renewable Energy Bill introduced into SA Parliament

6 minute read 19.09.2023 Andrew Corletto, Clay Wohling, Sarah Pick

The Hydrogen and Renewable Energy Bill was introduced into South Australian Parliament, we explore the key implications for existing and future projects.

Key takeouts

An additional category of licence has been introduced – Associated Infrastructure Licence. This will cater for port facilities, hydrogen power plants and desalination plants associated with hydrogen or renewable energy projects.

The HRE Bill introduces notice of entry requirements for resource tenements in order to support multiple land use between resources tenement holders and HRE licence holders rather than relying on negotiated access agreement arrangements.

The recently introduced HRE Bill takes into account submissions and feedback received during the consultation phase, responding to calls during the consultation phase of setting out in more detail, the transitional provisions that will apply.

The Hydrogen and Renewable Energy Bill (HRE Bill) was introduced into South Australian Parliament on Wednesday 13 September 2023. The introduction of the bill follows the South Australian Department of for Energy and Mining publication of, and consultation on, the draft bill in May this year (see our article following there publication). This article reflects the differences between the draft bill and the HRE Bill introduced into parliament. The Department has also released a Consultation Report (Report) following its consultation on the draft bill.

The Report provided that there was significant engagement during the consultation process with around 120 survey responses, feedback comments and written feedback received, representing a vast number of demographics. The highest amount of feedback was from stakeholders that fell within the categories of 'renewable energy groups' (16%), 'conservation and environmental groups' (10%) and 'farming and pastoral' representatives (8%).

The Report provided that the consultation process revealed that the general feedback was supportive of the HRE Bill and focussed on economic growth and the positive impacts that large-scale hydrogen and renewable energy projects will have for South Australia.

Consistent with the draft bill, the HRE Bill introduced into parliament has adopted the same 'one window to government' approach that is utilised in the South Australian mining and petroleum industry via the Mining Act 1971 (SA) (Mining Act) and the Petroleum and Geothermal Energy Act 2000 (SA) (PGE Act). The licencing and regulatory regime introduced by the HRE Bill is intended to cover the entire life cycle of a project starting at the investigative and land acquisitions stage and concluding at infrastructure decommissioning and rehabilitation of impacted land stage

The type of projects the HRE Bill is proposing to regulate

The specific type projects that the HRE Bill is proposing to regulate are:

Large-scale hydrogen projects that involve 'generating hydrogen'. The draft bill specifically provided that generating hydrogen does not include operations for the storage of hydrogen and the operation of a transmission pipeline required to be authorised under the PGE Act. However, this exclusion has been removed from the definition in the HRE Bill and will now be dealt with as 'designated licences'.
Renewable energy projects that involve 'renewable energy resources'. The definition in the HRE Bill provides that renewable energy resources are any of the following resources - light or heat from the sun, wind or air flow, wind generated waves, tides, ocean currents and any other resource prescribed by the regulations. This is the same definition that was in the draft bill.

The draft bill created 5 different categories of licences which cover the 'regulated activities', however the HRE Bill introduces a 6th category – an Associated Infrastructure Licence. An Associated Infrastructure Licence authorises an associated infrastructure activity which is defined to mean construction, installation, operation, maintaining, management and decommissioning of:

a hydrogen power plant; or
ports, wharves or jetties associated with the import or export of hydrogen or renewable energy; or
a desalination plant used for the primary purpose of supplying water used in generating hydrogen; or
any other infrastructure associated with other regulated activities prescribed by the regulations for the purposes of this definition,
but does not include an activity of a kind excluded from the ambit of this definition by the regulations.

The six licence categories are summarised below, outlining the activities authorised by a hydrogen generation licence and a renewable energy infrastructure licence. The expanded activities included in the draft bill are bolded.

Hydrogen generation licence

Construct, install, operate, maintain and decommission a hydrogen generation facility within the licence area (which must not exceed 5 km² in area);
Generate hydrogen for a commercial purpose;
Undertake other regulated activities of a prescribed kind within the licence area as specified in the licence.

Renewable energy infrastructure licence

Generate or obtain energy from a renewable energy resource specified in the licence;
Construct, install, operate, maintain or decommission renewable energy infrastructure;
Store, transmit or otherwise convey energy obtained from a renewable energy resource; and
Undertake regulated activities of a prescribed kind as specified in the licence.

Renewable energy feasibility licence

Explore a renewable energy resource in the licence area for the purposes of assessing the feasibility of exploiting a renewable energy resource; and
Construct, install, operate, maintain and decommission renewable energy infrastructure for the purposes of exploring a renewable energy resource.

Renewable energy research licence

Explore a renewable energy resource within the licence area and assess the feasibility of exploiting a new renewable energy resource; and
Exploit a renewable energy resource for the purpose of researching the capabilities of a technology, system or process for generating renewable energy; and
Construct, install, operate, maintain and decommission renewable energy infrastructure for the purposes of undertaking activities of the kind described in a preceding dot-point.

Special enterprise licence

Undertake regulated activities of a kind specified in the licence (a special enterprise will comprise the construction and operation of a commercial facility to generate hydrogen and/or renewable energy infrastructure).

Associated infrastructure licence

Undertake an associated infrastructure activity specified in the licence within the licence area;
Store, transmit or otherwise convey, within the licence area, energy obtained from a renewable energy resource; and
Undertake an activity within the licence area that is necessary or incidental to undertaking a regulated activity undertaken under another licence (noting that necessary or incidental may include the construction of access roads, camps or the construction and operation of water pipelines or water treatment facilities.

Land access

The HRE Bill applies to projects seeking to be located on pastoral land, State waters and prescribed Crown land ('designated land') and freehold land. Further, the HRE Bill ensures that 'owners' have particular rights and, like the Mining Act and the PGE Act, adopts a very broad definition of 'owner' which includes native title holders, pastoral lessees and resources tenement holders. The HRE Bill makes it clear that, access to freehold land will need to be secured through direct agreement with the landowners. The feedback during the consultation process indicated that there was some confusion on this issue.

To facilitate a competitive licencing regime, the HRE Bill allows for the Minister to declare an area of land comprising designated land that the Minister considers to be suitable for the operation of renewable energy infrastructure to be a 'release area'. Where a 'release area' has been declared by the Minister, there will be a competitive tender process whereby the successful proponent will have exclusive access to undertake feasibility studies and exploration activities.

'Release areas' are generally expected to be located on land where native title exists or might exist and consequently identification of such areas will be undertaken through a multi-criteria analysis process including formal consultation with native title parties (amongst others).

Transitional provisions and regulations

The draft bill was silent on transitional provisions and the consultation feedback indicated that stakeholders were concerned about extent and detail of the transition provisions to be included in the bill. Consequently, the Department consulted on a separate document addressing proposed transition provisions in August 2023. As a result of that consultation process, the HRE Bill includes transitional provisions which sets out proposed timing for existing and new projects during various stages of development, construction and operation.

The draft bill also did not address the interaction of the regime with will other Acts. Schedule 1 of the HRE Bill now sets out the related amendments to be made to the Mining Act, PGE Act and the Pastoral Land Management and Conservation Act 1989.

We will continue to monitor the progress of the HRE Bill closely and provide updates accordingly. If you would like to discuss any particular concerns you have in relation to the impact of the proposed HRE Bill on existing or future projects, please contact us.