Pastoral Land Management and Conservation (Renewable Energy) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 8 May 2014.)

The Hon. K.J. MAHER (16:44): I rise today to support the bill. This bill has undergone a comprehensive consultation process before coming to this chamber. In the original drafting of the bill a wide range of stakeholders were consulted, including the Pastoral Board, the Commissioner for Aboriginal Engagement and the South Australian Native Title Services Office. Consultation on the bill was announced publicly in October 2011 through a media release. It was initially slated for a two-month period but, at the request of a couple of pastoral lessees and the member for Stuart, was extended for another month, giving a total of three months' consultation.

At the beginning of the consultation period the draft bill and explanation was posted directly to all pastoral lessees in this state and all native title groups. Key peak bodies and boards were consulted. Renewable energy developers were made aware of the bill, and the consultation provisions were made available on RenewablesSA's website. Submissions were received from pastoral lessees, wind farm developers, financiers of wind farms, peak bodies, legal bodies representing native title holders and Defence representatives.

The majority of pastoral lessees were supportive of the initial draft of the bill. A few issues were raised in submissions on the bill, and these were substantially addressed through amendments to the first draft and incorporated in the current version of the bill. I am told that the overriding concern from pastoral lessees was in relation to the quantum of payment they would receive from wind farm licences on their property. The bill is designed so that the Minister for Sustainability, Environment and Conservation, as the issuer of the wind farm licence, receives payment from a wind farm developer and then passes the funds onto the prescribed interested parties. These parties consist of pastoral lessees and native title holders.

The amount to be passed on to pastoralists and native title holders was not specified in the original bill. The current version of the bill provides that 95 per cent of wind farm payments will be passed to the prescribed interested parties and 5 per cent will be kept for administration. It is worth pointing out that the amount that will be paid for a wind farm licence will be commensurate with that paid by wind farm developers to owners of freehold land, taking account of the extra costs of developing in remote locations. The quantum of this payment is significant and will assist in providing a drought-proof income source for pastoral lessees. In the case of solar, compensation provisions are currently provided for in the Pastoral Land Management and Conservation Act 1989.

Some pastoral lessees were concerned about the potential for land being resumed for a solar facility with no development then occurring on the land. This bill now includes a sunset clause, which provides that a developer needs to substantially complete the solar facility within five years or the land reverts back to the pastoral leaseholder. The bill also includes certain milestones for wind farm developers to track progress and to provide for licence cancellation should development not progress.

I am told that one of the submissions received highlighted that they wanted clarification that solar and wind farm developments would not put pastoral businesses at risk. In the case of wind, the activity of pastoralism and wind operation can coexist, as evidenced on freehold land. The added benefit is a yearly income. In the case of solar, compared with the size of a pastoral leasehold, these developments will be small and the pastoral lessee will be compensated.

Large solar photovoltaic facilities in Australia range from 10 megawatts for the Greenough solar farm in Western Australia up to 105 megawatts for the Nyngan facility in New South Wales. A 50 megawatt solar facility, for instance, would require approximately one square kilometre of land. For comparison, pastoral leaseholds in the state vary from 50 to 16,000 square kilometres in size. Even if the leasehold were at the small end of that range, a large solar facility would take only one-fiftieth, or 2 per cent, of the leasehold. It should also be noted that pastoralists often hold more than one adjacent leasehold.

Wind farm developers raised the issue of having exclusive access from other wind farm developers before a licence is issued during the feasibility stage of a development, as well as the ability to offer more than one licence for a wind farm to account for different ownership models. Both these issues have been addressed in this current bill.

Financiers of wind farms requested the ability to be able to consent to a varying of licence conditions, which has been addressed, and Defence representatives have stated that wind and solar farm developments are incompatible with Defence activities. I note that this bill will now ensure that no development will occur over Defence land.

One of the new sections of the bill was introduced as a result of consultation to include multiple land use framework provisions. This section allows the coexistence of wind farm developments and resource exploration. Existing resource tenement holders' rights are now preserved through the requirement to negotiate a land access agreement with any tenement holder under the Mining Act 1971 or the Petroleum and Geothermal Energy Act 2000 before a wind farm licence can be granted.

The state has been a significant beneficiary from wind farm generators, and I am told that, according to the Clean Energy Council, South Australia has attracted $3 billion in capital investment, which has translated to 842 direct jobs and 2,526 total jobs. I am told that a study prepared by Sinclair Knight Merz into the economic impact of five Hallett wind farms developed by AGL in the Mid North of the state estimated a 3.3 per cent increase in gross regional product during construction of the wind farms and a 1.4 per cent increase during operation. A recent Garrad Hassan report commissioned by the Clean Energy Council has shown that in the construction of a 50 megawatt wind farm it is estimated that $50 million will be provided to South Australia's gross state product and a 2 per cent boost to the region's gross regional product.

Wind farm project development generates employment in regional areas especially during the construction and maintenance phases. The report I mentioned before estimates that, for a 50 megawatt wind farm, 48 full-time equivalent direct construction positions are created and a further 4.63 full-time positions during operation. In addition to direct employment generated by construction and operation of the wind farm, there are, of course, flow-on effects to the wider community. Local retail and services benefit from the increased economic activity and the locality of a wind farm, and it is estimated for every direct construction and maintenance job created, two additional indirect jobs are created.

Additional benefits are created by wind farm developers who contribute funds to community groups to get projects that provide a public benefit to regions and in the form of sustainability or community development grants. It is my understanding that the amount of funding provided in the past has varied but has generally ranged from approximately $100 to $1,000 per megawatt of installed wind farm capacity. Some wind farm owners also contribute to local communities through direct sponsorship of projects or sporting events such as football clubs or community festivals. I commend this bill to members.

The Hon. K.L. VINCENT (16:51): I speak today very briefly at the second reading of the Pastoral Land Management and Conservation (Renewable Energy) Amendment Bill 2014 on behalf of Dignity for Disability in support of this bill. I would like to thank the Hon. Ian Hunter, Minister for Sustainability, Environment and Conservation, for availing my office of his staff member Andrew Fisher and departmental staff for a briefing on this bill.

Dignity for Disability supports the measures outlined in this bill that will allow pastoralists to receive between $8,000 and $12,000 per wind turbine for farmers and pastoralist lessees. We hope that these measures contribute to more licences being sought as well as granted and to help drought-proof properties for wind farms on pastoral lands and expedite the process in terms of solar measures. We certainly support the establishment of wind farms and believe that they are a good source of sustainable energy for South Australia. We have all of this open space and we certainly should be using it to generate renewable energy for the good of the future of this state. With those few brief words, I commend the bill to the house.

The Hon. T.T. NGO (16:53): I rise to indicate my support for this bill. This government has ensured that South Australia is foremost in renewable energy and climate change policy action. South Australia has reached its target of achieving 20 per cent renewable energy production by 2014 and has committed to achieving a 33 per cent generation of electricity from renewable sources by 2020.

In October 2013, the South Australian government committed to an investment target of $10 billion in low carbon generation by 2025 in recognition of the fantastic economic potential of this industry. Since 2003, there has been $5.5 billion in investment in renewable energy, with some $2 billion (40 per cent) of this investment occurring in regional areas. I am pleased to note that as of March 2013 in South Australia, 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 is a commendable result to date and one that enables us to be compared favourably internationally. We want to continue to build upon this achievement into the future.

The bill the government has introduced will provide renewable energy investors with access to 40 per cent of South Australia's land that is crown land subject to pastoral lease. The intent of the bill is to provide a new form of tenement for wind farm developers to exist in parallel with a pastoral lease and to fast track access to portions of pastoral land for commercial scale solar farms.

To date, wind farm development in the state has only occurred on freehold land. The bill seeks to make pastoral land as accessible as freehold land currently is to renewable energy investors. It is important for us to recognise that the solar resource in the north of our state is world class and realise the potential benefits of this resource.

The 2011 version of the bill was released for a three-month public consultation in October 2011. It was directly mailed to all pastoral lessees in the state, as well as being announced through a media release and posted on RenewablesSA's website for comment. Other direct consultation has occurred with the Commissioner for Aboriginal Engagement, the South Australian Native Title Services Office and the South Australian Chamber of Mines and Energy.

The bill was also subjected to an industry review to ensure it was fit for purpose from an industry perspective. As a result of this thorough consultation a number of issues were able to be addressed. For example, pastoral lessees were keen to have stipulated the percentage of a licence fee which would be passed through to prescribed interested parties under the bill. The bill was amended to address this issue.

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. Ninety-five 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. 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.

Flowing from the consultation process, pastoralists also queried whether wind farm developments would interfere with a pastoralist's ability to undertake their rights under the pastoral lease. The licence area of a wind farm will be very small compared to the overall size of a pastoral leasehold. The licence area will consist of a series of circles around each wind tower and a few areas that may, for safety, be locked, such as a substation. The wind farm licence authorises a wind farm developer to build access roads and infrastructure associated with the wind farm. The pastoral lessee will be able to make reasonable use of any access tracks that are built by developers from roads to the turbines. Pastoralism can occur between the wind turbines in the same way as occurs on freehold farming land.

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 very nature of pastoral lease land and the great variation in the scope of wind farm projects. As I have said, 40 per cent of the land in South Australia is government owned and used for pastoral purposes. This bill will open the land to renewable energy developers. Portions of this land contain high quality wind and solar resources.

For solar, I am told that interest from developers is mainly focused in the northern areas of state, where resources are highest. For wind, a detailed feasibility study for development potential on the Eyre Peninsula established that an outstanding area for wind farms is situated on crown land subject to pastoral lease. I am told that there is also an emerging trend of wind developers becoming more attracted to inland sites in South Australia.

The government is aware of a number of proponents seeking to access crown pastoral leasehold land to develop the projects. I am told the total estimated capital investment of these proposals is around $500 million, which is around 15 per cent of the $3 billion in existing capital investment in wind farm development. To date, existing investment has led to the creation of approximately 800 direct jobs, predominantly in regional areas.

This bill will ensure that South Australia will be the first jurisdiction to specifically allow for coexistence of wind farm development and the activities of pastoralism and resource exploration on crown land. The intent is to not only attract renewable energy investment to states but to stimulate growth in the clean energy industries of the future and provide employment and economic opportunities for many regional communities.

The government recognises the increasing value of the renewable energy sector and its importance to the economic future of the state, and that is why South Australia has committed to an investment target of $10 billion in low-carbon generation by 2025. I commend the bill to members.

The Hon. G.A. KANDELAARS (17:02): I rise briefly to indicate my support for this very important bill. The intention of this bill is to provide a new form of tenement for wind farm developers on land leased for pastoral purposes. In addition, it aims to fast-track access to portions of pastoral land for commercial-scale solar farms.

Growing our use of renewable energy will have a direct and lasting benefit to our environment, our state's sustainability and on our immediate and long-term economic prospect. We should all be committed to ensuring the protection of our environment and the sustainable use of our natural resources, because we know that a healthy environment is essential for a healthy community and a healthy economy.

South Australia leads the nation in addressing climate change, renewable energy investment and production, waste management and water security. We are the first state in Australia to introduce dedicated climate change legislation. We released a strategy to reduce greenhouse gas emissions and begin a climate change awareness program.

As a result of these policies, South Australia's emissions are lower today than they were in the 1990s, in spite of our economic and population growth. In fact, just last month the Australian government released the latest measures of South Australia's emissions reduction progress report. It states that South Australia's net greenhouse gas emissions were 30 million tonnes of carbon dioxide equivalent in 2011-12. This means that 2011-12 greenhouse gas emissions in South Australia were 10 per cent lower than the 1990 baseline. Interestingly, over the same period, South Australia's gross domestic product rose 65 per cent.

Quite clearly, the increased use of renewable energy can and does go hand in hand with economic growth. Here in South Australia we already lead the nation in the uptake of alternative energy sources. Since coming to government in 2002, we have seen the amount of electricity generated from renewable energy increase from 0.8 per cent to around 31.7 per cent.

According to all major research agencies, the science on climate change is clear and it is imperative we act now. The Intergovernmental Panel on Climate Change has released the working group II report 'Impacts, adaptation and vulnerability', and the working group III report 'Mitigation of climate change'. These reports show that the effects of climate change are already being felt around the world and that the world is ill prepared to manage its risks. They also show that greenhouse gases are growing globally at an increased rate and that immediate and significant mitigation action is required if temperature rise is to be limited to 2° by 2100.

South Australia must build on its national and international reputation as a leader in the use of renewable energy. If this bill is passed, it would make South Australia the first jurisdiction with legislation that specifically allows for coexistence of wind farm development and the activities of pastoralism and resource exploration on crown land. The successful passage of this bill would not only attract renewable energy investment to the state, it would also significantly stimulate growth in the clean energy industries of the future and provide employment and economic opportunities for many regional communities.

This is particularly important in light of recent federal cuts to the sector, particularly the axing of the Australian Renewable Energy Agency (ARENA). At a state level, we must continue to forge ahead in our renewable energy and climate change policies to ensure that we attract investment from national and international companies. The bill we are discussing 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 is important because we have already seen the positive benefit of creating the right environment for renewable energy investment.

We should be extremely proud of the fact that South Australia has already reached its target of 20 per cent renewable energy production by 2014 and we have 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 for this industry.

Since 2003, $5.5 billion have been invested in renewable energy with some $2 billion (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 the 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 successes and the direct regional benefits of these policies can be clearly demonstrated just by looking at the wind energy industry. Our state has proved an attractive destination for wind farm development. According to the Clean Energy Council, almost $3 billion have been invested in wind farms in South Australia, with 1,203 megawatts of capacity, or 559 turbines, installed to date. This represents 38 per cent of the Australian total wind power generating capacity right here in South Australia. Importantly, this investment has led to the creation to date of approximately 800 direct jobs, predominantly in regional areas. This is 800 people who may otherwise not have been employed.

The potential economic benefits are enormous. Wind farms in South Australia vary in size between 34.5 megawatts to 159 megawatts. Let us take a look at the example of a 50-megawatt wind farm. The Clean Energy Council estimates the construction of this wind farm could contribute between 0.1 and 2.6 per cent to the gross regional product, depending on the size of the regional economy. During the construction phase alone, it is estimated that 48 full-time jobs are created. In addition, there is the flow-on effect of 112 regional job opportunities being created indirectly.

There will also be direct benefits to pastoral leaseholders if this bill is passed. Each application for a licence will be negotiated on a case-by-case basis. This is in recognition of the diverse and individual nature of each lease. Before a wind farm licence is granted, the responsible minister will consult with the pastoral lessee and any other person who has an interest in the land.

In addition, the pastoral leaseholder stands to benefit financially from a wind farm licence. The South Australian government will charge a licence fee for the use of the pastoral lease land that is commensurate with the amount paid by the wind farm developers to the owners of freehold land. Ninety-five per cent of this fee will be distributed to a pastoral leaseholder and any other party which has an interest in the land, such as native title holders.

This payment will be far in excess of any compensation payment that may be made. Most importantly, this payment will provide leaseholders with a yearly income, that is, a reliable, drought-proof income. This is vital because the effect of climate change will be felt through changing rain and weather patterns that will continue to disrupt the earning potential of pastoral leaseholders. I commend the bill to members.

Debate adjourned on motion of Hon. T.J. Stephens.