Understanding recent Australian planning reforms crucial for transmission projects

With more than 5,000 kilometres of new transmission lines needed this decade to support Australia meeting its 2030 renewable energy targets, time is of the essence, however developers of transmission projects often face a lengthy approvals process before they can get their projects off the ground.

To help streamline planning approval processes and provide incentives for landowners whose land is required for transmission infrastructure, reforms are being introduced around the country. Balancing community expectations and environmental impacts will present some challenges and will need to be appropriately managed. As noted by the Australian Energy Market Operator (AEMO) in its 2023 Transmission Expression Options Report, “high-voltage infrastructure plays a critical role in the energy transition, but also can have localised impacts to host landowners, communities and the broader environment”.

Regulatory requirements related to biodiversity offsets, easements, environmental impacts and constraints also add significant costs to projects. In fact, in its report, the AEMO noted that regulatory and environmental approval processes make it highly unlikely for a new transmission project to be delivered less than three years after the expected publication in June of the AEMO’s Integrated System Plan, outlining the changes needed to continue delivering “secure, reliable, and affordable electricity” to the people of Australia.

Recent planning reforms

New South Wales

In November, the NSW Department of Planning and Environment introduced its Draft Energy Policy Framework (12-page / 3.3MB PDF). Intended to make approvals processes less complex for renewable energy and transmission projects, it provides guidance to applicants, communities and local councils on the assessment of renewable energy and transmission projects.

A specific draft transmission guideline was on exhibition between November and January, and comments made during the consultation process are currently under consideration, with the draft guideline expected to be finalised later this year. As proposed, the draft guideline would apply to new major transmission projects declared as ‘critical state significant infrastructure’ and ‘state significant infrastructure’ projects.

The draft guideline includes a ‘technical supplement for landscape and visual impact assessment’ which is to be applied when considering landscape and visual impacts as part of the route selection process. Developers of major transmission projects will be required to consider the draft guideline and the supporting technical supplement for visual impact assessment if referenced in the Planning Secretary’s environmental assessment requirements, and prepare an environmental impact statement in line with the technical guidance. The finalised guideline could apply even if the secretary’s environmental assessment requirements have already been issued and if the environmental impact statement is not submitted within six months of the guideline being released.

The draft guideline provides guidance on route selection, community engagement, and the assessment of visual, biodiversity, agricultural, bushfire risk, electric and magnetic fields, and aviation impacts. It also provides guidance on access arrangements where a developer may require consent to take on preliminary field work, acquisition agreements and benefit payment considerations.

The draft guideline could help provide clarity about assessments and approvals processes, however improvements to the draft guidelines are required to ensure unintended consequences are avoided. For example, greater clarity is required in the technical supplement in relation to the assessment of dwelling setbacks and applicable exemptions.

In addition, the requirement that preliminary visual impact analysis be part of the scoping report poses difficulties for developers, due to the high level of project detail that would be needed at such an early stage in the process. This requirement has the potential to require additional work to reflect any design changes in the environmental impact statement process which could lead to delays and create concerns for landholders.

Victoria

In April 2023, Planning Scheme Amendment VC261 was introduced to expand the existing development facilitation program (DFP) and help prompt assessment and decision making for renewable energy facilities, utility installations - including electricity transmission and distribution facilities - and associated subdivisions. Under clause 53.22 of the planning scheme, these projects will be treated as ‘significant economic development’.

The first step in the DFP is for an application for the project to be lodged and endorsed by the DFP Standing Advisory Committee. During this phase, the committee can issue requests for further information and require consultation with councils and referral authorities. Decisions on these applications will be made by the Minister for Planning under s 20(4) of the Planning & Environment Act 1987 (Vic), which means that the third-party review rights would be excluded.

Objections can still be lodged but the parties who are objecting cannot appeal the Minister’s decision to the Victorian Civil and Administrative Tribunal. In theory, this could reduce approvals timeframes for transmission projects, with the potential for decisions to be made within four months of the endorsement of an application.

While this appears encouraging, if a project has the potential to significantly affect the environment, it will still need to be assessed under the Environment Effects Act 1978 which means that an ‘environment effects statement’ may be required. Large scale transmission projects are likely to require the preparation of an environment effects statement, which can be a 24-month process. An environment effects statement was required for the Western Renewables Link project. Another major project, the Victoria to NSW Interconnector West, has been referred under the Environment Effects Act and is awaiting a decision by the Minister for Planning. 

In addition to the planning scheme amendment, the National Electricity (Victoria) Amendment (VicGrid) Bill 2024 was recently introduced before the Victorian Parliament and was considered on 30 April. The VicGrid Bill is expected to enact some of the core elements addressed in the Victorian Transmission Investment Framework which provides the policy basis for transmission infrastructure development in Victoria. The Bill also introduces the ‘Victorian transmission planning objective’ which includes the promotion of efficient investment in electricity services.

The Minister for Energy and Resources and the chief executive of VicGrid – a division of the Department of Energy, Environment and Climate Action – will be required to take this objective into account when making decisions. It is expected that this objective will also be reflected in the planning scheme, which is similar to the way the transport planning objective introduced by the Transport Integration Act 2010 currently needs to be considered when planning decisions are made.  

Western Australia

In December 2022, Western Australia introduced its ‘green energy approvals initiative’, a cross governmental collaboration to deliver faster environmental approvals for renewable energy projects.  

In November 2023, as part of the initiative, Western Australia also announced an exemption order - Environmental Protection (Renewable Energy Proposals) Exemption Order 2023 - made under the Environmental Protection Act 1986 (WA) to enable the Minister for Lands to grant an option to lease Crown land to developers of renewable energy projects while their proposal is under assessment by the state’s Environmental Protection Authority. The exemption order is applicable to proposals for projects which transmit electricity generated from renewable energy sources.

Landholder considerations

Lengthy engagement and negotiations with landowners whose land is required for transmission projects can delay project commencement and delivery. Generation, transmission and distribution companies can acquire an easement on private land to build, maintain, and operate transmission infrastructure with the agreement of the landholder.

To enable land access for transmission process, landholder payment schemes have been announced in several states, in addition to landholder’s compensation schemes already in place:

New South Wales - under the ‘strategic benefit payments scheme’ established in October 2022 for major new transmission projects by the Energy Corporation of NSW – a statutory authority responsible for the delivery of the state’s renewable energy zones – private landowners in NSW will be able to receive AU$200,000 (US$130,963) per kilometre of transmission line hosted, paid out in annual instalments over 20 years.

Queensland - under state electricity transmission system operator Powerlink Queensland’s SuperGrid Landholder Payment Framework, Queensland landholders who host new transmission infrastructure will receive higher payments, based on property-specific values and impact, as opposed to using only a flat rate.

Victoria - under the VicGrid Bill, the chief executive of VicGrid will be able to make payments to landholders for hosting new transmission projects for a typical area of new transmission easement at a standard rate of AU$8,000 per year, per kilometer of transmission hosted for 25 years. First payments under the new arrangements will go to landholders who host transmission easements along the Victoria to NSW Interconnector West and Western Renewables Link transmission corridors.

In addition to addressing landholder concerns, assessments of a transmission project’s impact on Aboriginal cultural heritage must be undertaken and should include consultation with the Aboriginal community in accordance with respective states’ relevant standards. Developers will need to work with Aboriginal knowledge holders who have experience in conducting cultural heritage assessments to identify sites of significance, including places and artefacts.

‘Nature positive’ reforms

Australia’s State of the Environment Report, which was published in 2021, painted a bleak picture for protected native fauna and flora species. This has led to the uplisting of several species and the addition of new species protected under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

It is not unusual for the referral process under the EPBC Act to exceed 24 months. Timeframes may be further impacted by the federal government’s reform of the EPBC Act via the ‘nature positive plan‘, which aims to strengthen Australia’s environmental laws in response to the independent review of the EPBC Act conducted in 2020.

The Department of Climate Change, Energy, the Environment and Water (DCCEEW) recently announced a AU$100 million investment to support faster environmental approval decisions for projects, including additional resources and staff to assess project proposals. DCCEWW has also indicated that it is funding further research to help determine areas that need to be avoided to help protect Australia’s most vulnerable places and species.

The recent reforms and initiatives around the country are a good start in helping to streamline approval processes and facilitate land access for transmission projects. Even so, environmental assessments and EPBC referrals remain lengthy processes and, in many jurisdictions around Australia, engagement with landowners remain challenging.

Project developers would benefit from seeking expert advice on how to best navigate planning approvals processes, environmental assessments and engagement with landowners, to ensure transmission projects begin construction in a timely manner.

Co-written by Niren Menon of Pinsent Masons.