SA hydrogen and renewable energy draft bill

3 minute read  07.06.2023 Andrew Corletto, Sarah Pick

The South Australian Department for Energy and Mining recently released the Hydrogen and Renewable Energy Act (HRE Act) draft bill for consultation.

Key takeouts

  • The purpose of the proposed HRE Act is to introduce and implement a licencing and regulatory regime for large-scale hydrogen and renewable energy projects in South Australia.
  • The publication of, and consultation on, the draft bill follows the Department's consultation on the 'Hydrogen and Renewable Energy Act: Issues Paper' that concluded earlier this year (noting that the Department has not yet released a 'final report' as this will follow upon the completion of the consultation on the draft bill).
  • The regime is intended to cover the entire life cycle of a project starting at the investigative and land acquisition stages and concluding at infrastructure decommissioning and rehabilitation of impacted land stage.

The draft bill 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 projects and activities the draft bill is proposing to regulate

The draft bill is proposing to regulate two specific types of projects:

  • large-scale hydrogen projects that involve 'generating hydrogen' - undertaking operations to create hydrogen (and any compound of hydrogen necessary for its processing, storage or transport) by processes such as the electrolysis of water or the reformation of natural gas. This includes operations or the storage of hydrogen. It does not include operations for the storage of hydrogen and the operation of a transmission pipeline required to be authorised under the PGE Act.
  • renewable energy projects that involve 'renewable energy resources' – namely light or heat from the sun, wind or air flow, wind generated waves, tides, ocean currents and any other resource prescribed by the regulations.

The draft bill applies to the following activities (the 'regulated activities') when they are undertaken within South Australia or in South Australian Waters:

  • generating hydrogen for a 'commercial purpose' - international export, manufacturing chemicals, sale or supply of electricity to customers, wholesale distribution of hydrogen to customers or any other purpose prescribed by the regulations
  • exploring for a renewable energy source
  • exploiting a renewable energy source - generating or obtaining energy from a renewable energy source and storing, transmitting or otherwise conveying energy obtained from a renewable energy source
  • infrastructure activities - undertaking the construction, installation, operation, maintenance or decommissioning of renewable energy infrastructure or a facility for generating hydrogen

Categories of licences

The draft bill creates 5 different categories of licences for the regulated activities. They are outlined below, with details on the activities authorised by each licence:

1. Hydrogen generation licence

  • Construct, install, operate, maintain and decommission a facility for generating hydrogen within the licence area (which must not exceed 5 km² in area)
  • Generate hydrogen for a commercial purpose.

2. Renewable energy infrastructure licence

  • Exploit a renewable energy resource specified in the licence
  • Construct, install, operate, maintain or decommission renewable energy infrastructure.

3. 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
  • Construct, install, operate, maintain and decommission renewable energy infrastructure for the purposes of exploring a renewable energy resource.

4. Renewable energy research licence

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

5. 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).

Land access

The draft bill applies to projects seeking to be located on pastoral land, State waters and prescribed Crown land ('designated land') and freehold land. Further, the draft bill ensures that 'owners' have particular rights (including rights to compensation and to be provided with particular information) and, like the Mining Act and the PGE Act, the draft bill adopts a very broad definition of 'owner' which includes native title holders, pastoral lessees and resources tenement holders.

To facilitate a competitive licensing regime, the draft 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. As 'release areas' are generally expected to be located on land where native title exists or might exist, they will be identified through a multi-criteria analysis process including formal consultation with native title parties (amongst others).

Transitional provisions and regulations

  • Current projects - the draft bill is currently silent on transitional provisions governing how projects in the advanced stages of planning will be impacted once the bill is passed and proclaimed.
  • Interaction with other legislation - the draft bill does not appear to address how the HRE Act will interact with, and impact, other Acts such as the Electricity Act 1996 (SA).

These issues may be addressed in regulations made under the HRE Act.

Submissions on the draft bill are open until 12pm Monday 26 June 2023. If you would like assistance in preparing a submission or to discuss any particular concerns you have in relation to the impact of the proposed HRE Act on existing or future projects, please contact us.