Pastoral Land Management and Conservation (Renewable Energy) Amendment Bill

Second Reading

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Housing and Urban Development, Minister for Industrial Relations) (15:45): I move:

That this bill be now read a second time.

I seek leave to insert the second reading explanation in Hansard without reading it.

Leave granted.

The Bill the Government is introducing today will provide renewable energy investors with access to 40 per cent of South Australia's land mass that is Crown land subject to pastoral lease.

This Government has ensured that South Australia is at the forefront of renewable energy and climate change policy action. South Australia has already reached its target of achieving 20 per cent renewable energy production by 2014 and has committed to achieving 33 per cent electricity generation from renewable sources by 2020.

In October 2013, South Australia committed to an investment target of $10 billion in low carbon generation by 2025 in recognition of the economic development potential of this industry. Since 2003, there has been $5.5 billion in investment in renewable energy with some $2 billion, or 40 per cent, of this investment occurring in regional areas.

As of March 2013, per person we have 725 watts of installed wind power compared to a national average of 163, and 205 watts of installed solar photovoltaic power per person compared to 98 nationally. This performance puts us in the international space for comparison.

The State has proved an attractive destination for wind farm developments. According to the Clean Energy Council, almost $3 billion has been invested into wind farms in South Australia with 1203 megawatts of capacity, or 559 turbines, installed to date. This represents 38 per cent of Australia's total wind power generating capacity.

Much of the State's solar investment has been achieved through individual household rooftop applications and solar now makes up more than 3.8 per cent of the State's electricity capacity. The largest installation to date is the one megawatt plant on the Adelaide showground roofs.

When the Pastoral Land Management and Conservation Act was originally drafted, renewable energy development was not envisaged. This amendment Bill makes it possible for a wind farm developer to apply for a licence to build and operate a wind farm on pastoral lease land. A wind farm development can coexist with pastoral activities in the same way as occurs on freehold farming land. The Bill also expedites access to pastoral land for solar energy projects.

To date, all wind farm development in South Australia has occurred on freehold farming land but we also have an excellent wind resource in some areas of our pastoral lease land. The solar resource in the north of our State is world class.

This Bill, if passed, will be the first of its type in Australia which specifically allows for the coexistence of wind farm development and the activities of pastoralism and resource exploration on Crown land. No other legislation of this type exists in Australia.

The wind farm licence authorises a wind farm developer to build access roads and infrastructure associated with the wind farm. The licence will allow a developer to fence off areas such as a substation where it is considered necessary to do so. A wind farm developer will make information available on an ongoing basis regarding planned activities on the land and the location of access roads and infrastructure, and a pastoral lessee will be able to make reasonable use of access roads built by a wind farm developer.

The wind farm licence conditions will be negotiated on a case by case basis in recognition of the varying nature of pastoral lease land and the great variation in the scope of wind farm projects.

A pastoral lessee stands to benefit financially from a wind farm licence. The South Australian Government will charge a licence fee for use of pastoral lease land that is commensurate with that paid by wind farm developers to owners of freehold land. This fee will take account of the extra costs associated with development in remote areas. 95 per cent of this fee will be distributed to a pastoral lessee and any other parties with an interest in the land, such as native title holders. An initial amount will be paid during the exploration and construction phases of the project and then an annual amount once the wind farm is operating.

A wind farm licence will be granted for at least 25 years with the option to renew for another term of at least 25 years. Prior to the granting of a licence, a wind farm developer will be able to gain access to pastoral land upon approval by the Minister responsible for the Act. The wind farm developer will need to give 14 days notice and access can be granted for: conducting investigations or tests; the temporary installation of devices; taking samples; or for any other purpose as agreed by the Minister. During this period, no other wind farm developer will be given approval for access to the same portion of a pastoral lease for a period of up to five and a half years in order to protect a developer's investment in the exploration phase.

During this investigation period, a developer must satisfy the Minister, after a period of two and a half years, that they have developed a plan for a wind farm on the land and are able to fund the completion of that plan. If the Minister is satisfied, a further three years for investigations will be granted.

Once a wind farm licence is granted the developer must reach two critical milestones. Within three years, a developer needs to demonstrate they have financing and have executed contracts for the construction of the major components of the wind farm. Within five years, the wind turbines must be erected and commissioning tests completed.

It is recognised that there are times when general economic and market conditions are uncertain for wind farm development and the Minister may choose to vary the milestone times mentioned provided genuine progress is shown by the wind farm developer.

It may also be important for an additional option to licence agreement to be negotiated with a wind farm developer on a case by case basis. This would allow for risk-based investment decisions to occur.

Sometimes, in the development of a wind farm, there is a requirement for more than one owner. For instance, one party may own the wind farm and another the connection line easement. In this case, the Bill makes allowance for more than one licence to be issued.

In issuing a licence there will be obligations on the licence holder to decommission and rehabilitate the wind farm area on completion of the operation period or on lapse of the wind farm licence.

Before a wind farm licence is granted the responsible Minister will consult with the pastoral lessee and any other persons who have an interest in the land. Before authorising the quantum of a wind farm payment, the Minister will also consult with interested parties.

A wind farm licence will not be issued until the applicant has entered into a land access agreement with the pastoral lessee. The negotiation of this agreement will give the pastoral lessee an ability to discuss sensitive areas such as water points, and to agree on the usage of common infrastructure such as access tracks.

If an application for a wind farm licence relates to pastoral land over which a mining tenement under the Mining Act 1971, or petroleum or geothermal tenement under the Petroleum and Geothermal Energy Act 2000 is held, a wind farm licence will not be issued until the applicant has entered into a land access agreement with the holder of the resources tenement.

It is recognised that resource exploration can coexist with a wind farm development and it may be possible also for resource production to coexist.

It is expected that a wind farm developer will provide to interested parties ongoing information pertinent to the development during each of the investigation, construction and operational phases of the project.

In the case of solar energy development, pastoralism and commercial scale solar energy production cannot coexist. In this case it is necessary for the land to be excised from a pastoral lease. Currently there is a provision in the Act for land to be removed from a pastoral lease. A developer will need to agree commercial terms with the pastoral lessee and land can then be surrendered upon ministerial approval. In this case a decision will be given within a one month period.

Once the land is surrendered it reverts to unalienated crown land and is dealt with under the Crown Lands Management Act and a miscellaneous lease can be issued under this Act.

In circumstances where agreement cannot be reached, there is a mechanism in the Act for resumption of land. The time for resumption in the Act is at least six months. The amendment will reduce this time to two months. Pastoral lessees are entitled to compensation if a portion of a leasehold is resumed.

The Government is reducing the resumption time in order to give some certainty to investors in processes over which it has jurisdiction. In cases where warranted, the Government will offer a lease to a solar energy developer for minimal rent in recognition of the costs associated with large-scale solar energy production. In the case of wind developers accessing pastoral lease land through the excision of part of a pastoral leasehold, a wind farm lease will be offered at a rent commensurate with that paid by wind farm developers to owners of freehold land. This rent will take account of the extra costs associated with development in remote areas.

If the construction of the solar energy facility has not been substantially completed within five years after the date that resumption takes effect, the Minister may choose to restore the excised area back to the pastoral leasehold.

According to the DefenceSA, the Woomera Protected Area is not suitable for wind and solar development due to interference with defence equipment. For this reason we will not be issuing licences or leases over this area for wind or solar developments.

No wind or solar energy development will occur on land subject to a mining lease unless associated with the mining tenement.

It should be noted that the intent of this amendment relates only to the Pastoral Land Management and Conservation Act and does not seek to alter any processes under any other Act. Developers will need to be cognisant of the requirements of all other relevant Acts.

In regards to the issue of native title, a wind farm licence will not be granted on pastoral lease land, nor land excised from a pastoral lease, until any native title issues have been adequately addressed as per the Native Title Act.

In summary, this amendment is designed to not only attract renewable energy investment to the State, but enable people with an interest in pastoral lease land, particularly in near proximity to transmission lines, to gain financially from this form of development. It should be noted that South Australia's success in attracting investment not only stimulates growth in the clean energy industries of the future, it provides employment and economic opportunities for many regional communities.

I commend this Bill to Members.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Pastoral Land Management and Conservation Act 1989

4—Amendment of section 3—Interpretation

This clause inserts definitions for the purposes of the measure.

5—Amendment of section 4—Objects

This section is amended to extend the scope of the objects of the Act as a consequence of the amendments relating to wind farms operating on pastoral land.

6—Amendment of section 9—Pastoral Land Management Fund

This section is amended to facilitate the inclusion of 95% of any fee for an approval under Part 6 Division 4 to enter and occupy pastoral land and any wind farm licence fee in the Fund and to allow the Fund to be applied for the purpose of making payments under Part 6 Division 4.

7—Amendment of section 22—Conditions of pastoral leases

This section is amended to provide that a pastoral lease will be subject to the general condition and reservation providing for the lessee's obligation not to hinder, obstruct or interfere with the holder of a wind farm licence under Part 6 Division 4 who is exercising, or attempting to exercise, a right under the licence. A lease will also be subject to a reservation providing for the right of the Minister to grant a wind farm licence under Part 6 Division 4. The Minister may also give directions to a lessee in relation to a wind farm licence on the land.

The new condition and reservations will be taken to be a condition and reservations of existing leases by virtue of section 22(1a) of the Act.

8—Amendment of section 31—Alteration of boundaries

This section is amended to provide that pastoral land (that is, land that forms part of a pastoral lease) resumed for the purposes of a solar energy facility reverts to being pastoral land under that lease if construction of the facility has not, in the opinion of the Minister, been substantially completed within 5 years after the date on which the resumption took effect.

9—Amendment of section 32—Resumption of land

This section is amended to provide that a resumption of pastoral land for the purposes of a solar energy facility may take effect on a day falling at least 2 months after the date on which notice of intention to resume the land was given by the Minister.

10—Insertion of Part 6 Division 4

This clause inserts Part 6 Division 4 as follows:

Division 4—Wind farms

49A—Interpretation

Proposed section 49A inserts definitions for the purposes of the Division.

49B—Minister may grant licences

Proposed section 49B provides for the granting of wind farm licences.

49C—Applicant for licence to enter access agreement with resources tenement holder

Proposed section 49C provides for an applicant for a licence to enter into an access agreement with the lessee and any resources tenement holder.

49D—Interaction between Division and licence

Proposed section 49D deals with the interaction between the Division and a licence.

49E—Rights under licence

Proposed section 49E provides that a wind farm licence may grant such rights (in relation to the operation of the wind farm as a whole or specified aspects of the wind farm) as the Minister considers necessary for the proper functioning of the wind farm to which the licence relates and may include the right to exclude the lessee or any other person from infrastructure associated with the wind farm (provided that the licence must be consistent with an access agreement entered into in relation to the land).

49F—Minister to fix terms and conditions

Proposed section 49F provides for the Minister to fix terms and conditions of a wind farm licence.

49G—Waiver of conditions etc

Proposed section 49G allows the Minister to waive a breach of, or compliance with, a condition of a licence, or to waive, reduce or remit any licence fees payable under a licence or allow any licence fee, or part of a licence fee, to be paid at a time other than that specified in the licence.

49H—Dealing with licence

Proposed section 49H relates to the manner in which a licensee may deal with a licence.

49I—Cancellation of licences

Proposed section 49I provides for the cancellation of a licence by the Minister on certain grounds.

49J—Access to pastoral land prior to grant of licence

Proposed section 49J provides for a power of entry to pastoral land for a person who intends to apply for a wind farm licence to conduct certain activities or for a purpose authorised by the Minister.

49K—Payments

Proposed section 49K provides for payments to certain prescribed interested parties (who are defined) if an approval is granted under section 49J or a wind farm is to be constructed and operated on pastoral land.

49L—Appeals to Court

Proposed section 49L provides for a person dissatisfied with a decision under the Division to appeal to the Environment Resources and Development Court.

49M—Exemption from stamp duty

Proposed section 49M provides that the grant or renewal of a wind farm licence is exempt from stamp duty.

49N—Special provisions relating to Murray-Darling Basin and River Murray Protection Areas

Proposed section 49N relates to the Murray-Darling Basin and River Murray Protection Areas.

49O—Application of Crown Land Management Act 2009

Proposed section 49O relates to the application of certain parts of the Crown Land Management Act 2009.

49P—Rights under wind farm licence to prevail

Proposed section 49P provides that, despite section 62 of the Act, a licence or any other interest in land may not be granted by or under any other Act if to do so would be inconsistent with the rights of the holder of a wind farm licence under the Pastoral Land Management and Conservation Act 1989. However, it is also provided that the section does not prevent the renewal of a licence or other interest in land, or the grant of a licence or other interest in land that is associated with a licence or interest in land granted before the commencement of this Division or with the consent of the holder of the relevant wind farm licence.

Debate adjourned on motion of Ms Chapman.