Queensland powers up its energy transition with new Bill

On 24 October 2023, the Minister for Energy, Renewables and Hydrogen and Minister for Public Works and Procurement introduced the Energy (Renewable Transformation and Jobs) Bill 2023 into Queensland Parliament.

The Bill reflects similar reforms enacted in New South Wales and Victoria and follows:

• the release of the Queensland Energy and Jobs Plan, launched in September 2022, which outlined the pathway to transforming Queensland’s energy system to deliver renewable power (the Plan); and
• a four-week period of public consultation of the exposure draft of the Bill.

This article will summarise its key provisions as well as highlight some of the changes to the Bill from the exposure draft following consultation.

Renewable energy targets

The Bill establishes the three renewable energy targets for Queensland:

• 50% renewable energy by 2030;
• 70% renewable energy by 2032; and
• 80% renewable energy by 2035.

The Bill also creates reporting and review mechanisms under which the Minister must review the targets at least every five years for the purposes of deciding whether the targets remain appropriate.

While the exposure draft primarily focused on solar, wind, and biomass, the Bill explicitly identifies all renewable energy sources included in the methodology for calculating renewable energy generation, which include geothermal and specific forms of hydropower.

The introduction of the targets aligns with similar efforts across Australia, with the Commonwealth setting a non-legislated target of 82% renewable energy by 2030, South Australia committing to 100% renewables by 2030, the Northern Territory's renewable energy target of 50% by 2030, and Victoria's target of 50% by 2030. Instead of introducing a percentage renewable energy source target, New South Wales (NSW) aims to achieve, at a minimum, a capacity target of at least 12 GW of renewable energy generation and 2 GW of long-duration storage by 2030. ^[1]

These "renewable energy targets" are different to the emission reduction targets that focus directly on greenhouse gases emissions which have been proposed or introduced across Australia, such as NSW's proposed target to reduce greenhouse gas emissions by 50% by 2030 and to achieve net zero emissions by 2050 under the Climate Change (Net Zero Future) Bill 2023 (NSW). We note that the Queensland Climate Transition Bill 2023 (Qld), which was introduced in March 2023, proposed a 75% reduction in greenhouse gas emissions by 2030 but was not recommended to be passed as law by the State Development and Regional Industries Committee in September 2023.

Public ownership assurance

The Bill requires the Minister to prepare a strategy which targets a minimum of 54% public ownership of generation assets, which was increased from 50% in the exposure draft, and complete ownership of transmission, distribution, and deep storage assets by 2035.

The definition of generation assets has been amended in the Bill from the exposure draft to exclude assets that are predominantly used to generate electricity for conversion to a form of energy suitable for export, such as those generation assets used in the production of green hydrogen or ammonia for exportation.

Infrastructure Frameworks for the Queensland SuperGrid

The Bill establishes a framework for the formal making of the Queensland SuperGrid Infrastructure Blueprint (the Blueprint), which was released in September 2022 alongside the Plan, and provides for the Minister to undertake biennial updates to the Blueprint.

The Blueprint outlines the roadmap to transforming Queensland’s electricity system by detailing the deployment of necessary energy infrastructure such as the backbone transmission infrastructure (known as Priority Transmission Investments), the creation of Renewable Energy Zones (REZs), and the establishment of large-scale pumped hydro energy storage facilities.

Priority Transmission Investments

The framework established for Priority Transmission Investments allows the State to identify and assess these projects outside of the national framework, and direct Powerlink to undertake construction of the priority projects. These provisions are aimed at allowing the State to diverge from the Regulatory Investment Test for Transmission (RIT-T) (being the traditional assessment guideline for the development of transmission infrastructure under the National Electricity Law and National Electricity Rules) to the extent that it is appropriately required to allow the Minister to consider wider State economic or social benefits associated with the Priority Transmission Investment. This approach has also been adopted in NSW, through the Electricity Infrastructure Investment Act 2020, which empowers the Minister to direct Powerlink to take action in relation to 'Priority Transmission Infrastructure Projects.

REZs

The Bill also establishes a REZ Delivery Body to identify the parts of Queensland suitable for a REZ with reference to the areas identified in the Blueprint and to make recommendations to the Minister to declare REZs. In some cases, the Minister may also request the REZ Delivery Body to undertake a REZ assessment for a specific part of Queensland.

Once a part of Queensland is recommended to be declared as a REZ, the REZ Delivery Body develops a management plan which identifies the geographic boundary, the renewable energy sources, the transmission network and the REZ controlled assets (being transmission assets that are identified in the REZ declaration, which are not part of the REZ transmission network, that will materially affect the capacity or functioning of the REZ transmission network).

After considering the assessments and the management plan, the Minister has the authority to declare a REZ by regulation.

Governance and advisory bodies

The Bill establishes the Queensland Energy System Advisory Board and the Energy Industry Council and also provides for the appointment of the Queensland Renewable Energy Jobs Advocate.

The Queensland Energy System Advisory Board will comprise of experts in the Australian energy sector and is to provide technical advice to the government on matters such as the Blueprint, the long-term projections for electricity demand, optimal infrastructure pathways, and is tasked with preparing annual progress reports on renewable energy targets.

The Energy Industry Council will comprise representatives from energy unions, Queensland's publicly owned energy businesses and government representatives as well as an independent Chair. This body will provide advice to the Minister in relation to the Blueprint’s impact on energy workers, employment opportunities and monitor implementation of the Job Security Guarantee and support workers in coal-fired power stations.

The Queensland Renewable Energy Jobs Advocate is to be appointed to provide advice to the Minister on opportunities to increase employment in the energy industry, including to advise on any barriers or strategies to encourage investors or employers to create opportunities.

Overlapping tenure issues

In light of the Bill's establishment of the REZs, it remains unclear how the government intends to deal with the emerging issues associated with the co-location of renewable projects and mining or petroleum projects in Queensland.

In contrast with mining or petroleum projects, renewable energy project proponents are not granted a dedicated form of title or tenement which affords them the right to enter upon and explore or develop private land for the purposes of the renewable project. Instead, renewable proponents rely on alternative access arrangements with landholders through the use of leases or licences.

The reason for the distinction lies in the doctrine that the ownership of minerals and other natural resources beneath the land is vested in the Crown, as opposed to the landholder, and of which rights are granted to proponents to access land to explore and extract such resources. However, as renewable resources, such as solar or wind, are not natural resources which are reserved to the Crown, proponents are not granted any tenure to develop such projects nor are they afforded similar statutory access rights.

The current regime in Queensland does not deal with the coexistence of competing land uses between any renewables project and the activities of the holder of a mining or petroleum authority, unlike the framework that currently exists between mining and petroleum projects. In the scenario where a resources company seeks to extract minerals on land where a renewable energy project has been developed, as it currently stands, the renewable energy proponent will likely have to rely on any of their agreements with the landholder to protect their rights to develop a project, which will of course depend on the status of their negotiations and agreements.

Renewable project proponents will likely face further hurdles to establish projects in circumstances where resources authorities have negotiated particular provisions in their land access agreements which seek to exclude landholders from entering into arrangements in relation to renewable projects.

How these exclusive provisions play out in practice is yet to be seen.

Next steps

The Bill has been referred to the Transport and Resources Committee for consideration and is due to table its report on the Bill by 1 March 2024, following which the Government will have three months to respond to any recommendations.