Explainer: The approval process for renewable energy infrastructure
State approvals, federal approvals, the Australian energy regulators, and the role of local councils. It can be a confusing process. We break it down here.
The federal government is on a mission to roll out renewable energy infrastructure across the country, with the latest approvals for a large solar farm near Forbes and a Riverina wind farm, both in New South Wales.
But federal government approval isn’t all that is needed, with a convoluted and sometimes confusing process undertaken to get a project off the ground. So how is it done?
There are exceptions across states and projects, but using the ‘development journey’ from the Department of Climate Change, Energy, the Environment and Water, The Weekly Times has outlined the general process.
Pre-development
A project developer conducts feasibility studies to identify suitable locations for renewable energy infrastructure.
This includes doing early-stage environmental surveys and monitoring – which can be required to have up to two years of data in some cases – as well as temperature monitoring for solar projects, and/or meteorological evaluation towers for wind.
There also needs to be a study on the feasibility of the project being able to connect to the electricity grid, through a connection inquiry to a Network Service Provider (NSP), who consults with the Australian Energy Market Operator.
Throughout this pre-development phase, proponents are encouraged through best practice, or required through regulatory processes, to engage with land/lease holders, and act on input from the start of the design process.
A proponent can during this stage make agreements with landowners for leasing or purchasing land for the infrastructure.
Development
Once a site is identified, the developer then submits a development planning application to the relevant state planning body, to ensure a project aligns with zoning laws, building codes, regulations and the like.
Most large scale developments are classified as state significant developments, and therefore bypass local council approval and are assessed at the state level.
The development application can be accompanied with an environmental impact statement, which each state has different criteria for, but are generally for larger projects that are expected to have a great community impact.
Federal government approval is only needed if it triggers the Environment Protection and Biodiversity Conservation Act 1999. It is Australia’s main national environmental legislation designed to protect matters of national environmental significance (MNES), and is currently under review.
The EPBC Act approval runs concurrently with state-level assessments.
Once submitted, the development application and environmental impact statement are placed on public exhibition for a minimum of 28 days, during which stakeholders and community members can provide feedback.
If the project receives significant objections or is particularly complex, it can be referred to the independent planning commissioner (IPC) or state minister for determination.
States have different criteria in terms of how many objections will lead to a referral to the IPC.
If approval is given by the IPC or state minister, which could include conditions on the approval, proponents undergo a process with a network service provider (i.e. transmission lines owner) and the Australian Energy Market Operator to obtain a connection agreement.
Then, it’s up to the proponent to make sure its financing is well-positioned to deliver on the project.
They can do this by securing access to capital, either via debt or equity funding, with an offtake agreement, which provides assurance to a financier that a project’s expected cash flows can be used to repay debt, often a prerequisite for project financing.
Construction
A ‘notice to proceed’ is provided to a Engineering, Procurement and Construction contractor, which oversees the life cycle of the project from initial design to handover, to confirm the construction environmental management plan is approved and in place, then physical works commence.
The conditions of the development approval and the adherence to the construction environmental management plan monitored throughout construction.
Commissioning
The developer registers to the relevant state energy market, at least three months before commissioning.
Regulators certify the project to make and sell renewable energy.
The proponent prepares data for testing, at least three months before commissioning, and everything is tested to make sure it is working.
