The State Government has recently introduced a new bill, the Hydrogen and Renewable Energy Bill 2023, which is intended to set up a regulatory framework for both hydrogen generation and renewable energy infrastructure in South Australia.
The Bill in its current format will potentially have widespread ramifications for all South Australians, but particularly those outside of metropolitan areas.
As currently drafted, it appears that the intention is to allow the Government to establish areas of ‘designated land’, in respect of which the provisions of the Bill will apply. The Bill also provides for various types of licences, which can be obtained to permit a range of activities on designated land- a person or entity with the benefit of a licence will be able to access and use an area of designated land for the purpose provided for in the licence. It seems that freehold land will not generally be able to be used, although this is not explicit and, in any event, there are exceptions for certain types of licences whereby freehold land can be utilised, such as for a hydrogen generation facility.
The most significant change that arises from the Bill, however, is that the Bill appears to drastically change the current arrangements in respect of wind and solar farms.
The existing legislative arrangements allow landowners and renewable energy companies to directly negotiate and enter into a commercial arrangement for the use of a landowner’s property (or leaseholder’s land in the case of pastoral leases) for solar farms or wind turbines. If the landowner and renewable energy company can’t reach agreement on satisfactory commercial terms, the renewable energy company is not able to proceed with erecting a solar farm or wind turbines.
What is proposed by the Bill is to usurp this commercial relationship by providing renewable energy companies with a right to access land, establish solar or wind farms and pay compensation based on ‘losses’ (being damage to land and loss of productivity or profits) rather than on a commercial basis. This presents a significant erosion of a landowner/lessee’s rights and entitlements, with the Bill having the consequence of treating the installation of wind and solar facilities in almost the same way as a mineral under the ground and akin to what occurs under the Mining Act.
Whilst the Bill has recently gone through a consultation stage, it is anticipated that it will be pushed along relatively quickly by the Government, so it will be interesting to see how it all unfolds.
This article was published in The Stock Journal, in August 2023.