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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2023-09-26 Daily Xml
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Bills

Hydrogen and Renewable Energy Bill

Second Reading

Adjourned debate on second reading (resumed on motion).

The Hon. N.F. COOK (Hurtle Vale—Minister for Human Services) (15:38): South Australia has been a leader in renewable energy and this bill is seeking to ensure that we continue to lead Australia in this critical part of our economy and our community. When you drive around the suburbs and country towns of South Australia, you see rooftop solar on homes everywhere. As a community, we have now embraced this as part of our everyday lives.

I am really proud of the South Australian Housing Authority's work with Tesla on the South Australian Virtual Power Plant that has seen panels or batteries placed on around 3,000 homes to this point, and another 4,000 are on the way. We are working to expand that program so that people living in community housing provider residences are also able to join the program.

When I take my regular trips to the Upper Spencer Gulf, I see the Aurora solar thermal tower and its field of mirrors. I drive past solar farms in other regional areas, and the recent Royal Show was a great reminder of how we have turned commercial rooftops into clean energy generators. Our wind farms stretch across the state and majestically line the road to the Upper Spencer Gulf. They have played a key role in getting our state to more than 70 per cent renewable energy, and on many days fully renewable energy.

Whether it is in the Mid North or the bottom tip of Yorke Peninsula around Edithburgh, the new version of windmills are doing their bit for our energy future. Windmills have been an iconic part of the Australian landscape for generations. It was all about turning wind in the air into flowing water from the ground in the old days, but now it is about turning wind into flowing electrons. We are now embarking on the next phase of this journey, which will see hydrogen become another foundation of our energy transition.

Change is not easy, and that it is why the government has a key role to play in making sure that we have the right regulatory frameworks in place. These will ensure industry has the confidence to invest and the community has confidence that change will lead to a better world for our children and for generations to come.

My colleague the Minister for Energy and Mining has been working on our hydrogen plan for years, and this bill is a testament to this vision for a future that supports industry, the environment and local communities. After a huge amount of work in opposition, the work continued in government with extensive consultation to make sure that we do get this right. A comprehensive issues paper was released in late 2022 and a draft bill released for consultation in May 2023. Almost 200 submissions were received throughout the consultation. It showed the level of community interest in this generational change.

Our government has a deep commitment to work with Aboriginal communities, and our consultation included two Aboriginal renewable energy forums in Port Augusta in November 2022 and March 2023. This helped us to understand the issues and challenges impacting Aboriginal groups and to discuss opportunities to work together on the development of renewable energy.

I have been to the Upper Spencer Gulf more than half a dozen times since the election last year. We have held one of our fantastic country cabinets in the region, and the communities have welcomed the opportunity to share their thoughts and know they are being listened to. A regional visit, dedicated workshop and follow-up online webinar were delivered for the pastoral community to support quality engagement on the draft bill.

Eighteen information sessions have been conducted across South Australia's regions during consultation. There have also been two online webinars for those who could not travel and those who wanted to talk in person to the government. These webinars had over 200 attendees and recordings were viewed hundreds of times later on. Dozens of meetings were held with key stakeholder groups and individuals, providing an opportunity to hear directly about the proposal and to ask any questions of the government.

This is not the end of the conversation with the community. The government will continue to work with stakeholders to develop the associated regulations and to identify the first release areas for competitive tenders under the framework. Similar to other legislation, the bill also includes provisions that require a review to be initiated five years following the commencement of the act, and indeed every five years thereafter.

The bill before us is the nation's first legislative framework designed to provide a coordinated approach to the growing hydrogen and renewable energy industries. South Australia is heading for a new wave of large-scale hydrogen and renewable energy development at a scale not seen before, with more than $20 billion of projects in development.

The change in scale and complexity demands a single end-to-end framework that considers the needs of the environment, landowners, communities and the state's strategic and economic ambitions. The Hydrogen and Renewable Energy Bill represents six acts being merged into one, which will minimise red tape for prospective investors, apply to both freehold and government-owned land and support the government's Hydrogen Jobs Plan.

On freehold land, proponents will need to secure access to land through direct agreement with landowners, preserving current arrangements. A new competitive system will be introduced for access to and licences for projects on pastoral lands and also state waters. This enables the government to responsibly assign access to some of the state's most promising areas for renewable energy development.

The declaration of these release areas will only occur after a consultative process involving government agencies, native title holders and other impacted stakeholders. The declaration of a release area will enable a competitive tender process for feasibility licences over the land and waters, with applicants to compete based on transparent selection criteria. This will ensure the state only hosts those projects willing to embrace coexistence with current land uses and deliver community and environmental benefits through their projects.

Five licence types will be created relating to the key stages of renewable energy projects, from the early research and feasibility stage right through to the construction, operation and closure of facilities, which I will describe:

renewable energy feasibility licence/permit: enables exploration for renewable energy, including construction of monitoring equipment;

renewable energy infrastructure licence: permits construction, operation, decommissioning and rehabilitation of renewable energy infrastructure;

renewable energy research licence: permits construction, operation, decommissioning and rehabilitation of renewable energy infrastructure for the purpose of researching the capabilities of a technology, system or process;

hydrogen generation licence: permits construction, operation, decommissioning and rehabilitation of hydrogen generation facilities; and

associated infrastructure licence: permits ancillary infrastructure (transmission, roads, water treatment) and associated facilities (hydrogen power plants, ports for hydrogen product export, desalination for hydrogen production).

These proposed measures reflect the Malinauskas government's commitment to the renewable energy transition and to a renewable energy and hydrogen sector that is ecologically sustainable and also responsible. While the bill is specific to hydrogen and renewables, it is fundamentally about our future as a community.

This bill supports the development and growth of new industries and jobs, both directly and indirectly. Most of the jobs that exist in our community today did not exist when our grandparents were born. Communities that do not plan ahead and take control of their future face the very real risk of falling behind, but the Malinauskas government is taking the opposite approach: we are planning for prosperity in the long term.

We are working toward better early childhood education, a more inclusive community that helps people to live their best lives and a community where more people have stable, affordable housing, all while we build up the industries of the future. That is what good government should be doing—working together as a team to solve the complex challenges in front of all of us.

My electorate may not be high on the agenda for a hydrogen hub, but it stands to gain great benefits from the opportunities and wealth that new industries deliver. The children growing up in the southern suburbs have a better chance of inheriting a clean, green environment, and passing that on to their kids and their grandkids, if we make the transition to renewable energy in a safe way. This is, I am sure, our future.

Developing a hydrogen industry at scale gives us the opportunity to help with cost-of-living pressures. This bill will help to unlock the state's pipeline of renewable energy projects, with estimated capital investments, as I said before, of more than $20 billion. In simple terms, this means jobs, good jobs, sustainable jobs. Good jobs put food on the table, a roof over heads, and give people the dignity of making choices about how they live their lives.

The bill, and the emerging industry, will help to increase supplies of reliable, affordable, and clean renewable energy. Renewables are often reported as the lowest cost form of energy, and this helps households and businesses everywhere. The bill will also facilitate hydrogen production, which stands to be a cheaper and cleaner form of long duration storage than the New South Wales coal supplies that we presently rely on through interconnectors.

While our minister worked his guts out in opposition to pull the key parts of our hydrogen plan together, those opposite did not manage to put together a plan with the full power and resources of government behind them and he really does deserve great credit for that work that was done.

In government, we announce spending and deliver projects all the time, and sometimes it can be easy to lose sight of the real and lasting impact that we can have on our community. The Attorney-General has often spoken about his perspective on achievements in politics and reflects on his work on voluntary assisted dying and our state's Aboriginal Voice to Parliament. These may be the most important things that he ever achieves and we are achieving them alongside him.

For me, it is about making sure that we create and foster a more inclusive community where people are safe, supported and just that little bit kinder to each other. For the Minister for Energy and Mining, supporting a new industry that drives investment, jobs and a more sustainable world is something he should rightly be proud of, and I am proud that I am working alongside him and proud of him for doing that and more. I commend the bill to the house.

Mr ELLIS (Narungga) (15:49): I rise to make a brief contribution on this bill. I thank the government for a briefing this morning explaining it to me. It was much appreciated and quite informative. Since that time, it has been interesting to follow the debate and listen to the government's speakers singing its praises as well.

I am coming at it from a slightly different perspective, and that is with the experience of dealing with some land access disputes that arose in the course of my time in the previous parliament with respect to mining tenements. Those fears might well transfer across onto this new legislative regime. In bringing that to the attention of the house, I acknowledge that the intent of this bill is clearly to deal with Crown land, pastoral land and leasehold land.

In essence, I do not necessarily have the same dispute with government making use of the land that it theoretically owns for these projects. That is probably within the remit of what it wants to do, but we have heard speakers talk about how this new licensing scheme will become available to proponents who try to make use of it on freehold land. That is where my fear lies: that we—the parliament and, more succinctly, the government—will open ourselves up to a new wave of land access disputes. Just because the cause is arguably more holy than a mine might be, I suspect that the landholders who object to having these new initiatives on their land will be no less despondent about having it forced upon them.

We have heard speakers say—and I paraphrase here; it is not a direct quote, so apologies if I get it slightly wrong—how the existing system will be transferred over and these licences will be able to be applied for in a similar fashion. I would submit to this house that the existing system is not working all that well. It is the source of much chagrin for landowners around the state, and opening up another regulatory scheme for that system to interact with is potentially going to leave this government open to some more angst for landowners. I would like to bring that to the house and, in so doing, observe a couple of things.

On a number of occasions throughout the bill it is referenced that the ERD Court will be the deciding jurisdiction when it comes to disputes and where agreement cannot be reached between proponents and landowners. I would submit to this house that this has not worked when it comes to mining land access disputes and that those who have had cause to interact with it have felt that the ERD Court is very much in favour of the miner and, I suspect, will be very much in favour of these developments when they come before it as well.

For those who wish to maintain incumbent land use, for those who wish to maintain the use that has been on that land for generations, they might well find themselves at the same disadvantage that people in dispute with mining companies have found themselves in previously. It has also been referenced that investigations are taking place with the landowner advisory service. Once again, I would submit that this has not necessarily worked as well as one might have hoped when it was initiated and it will have a similarly, I suspect, unsatisfactory relationship with landowners when and if that is to take place.

The purpose of my contribution, as I said, is to bring to the attention of the house my fear about a new wave of disputes when it comes to land access. Other than that, I commend the government for the initiative and for trying to develop new ways to lower energy costs which are having such a detrimental impact on so many businesses and households around the state. I certainly hope it has that effect and that we have some reprieve for those people paying their bills and that, with the benefit of hindsight, I am proven wrong with my concerns about land access disputes and that it goes far more swimmingly than I predict. With that brief contribution, I look forward to the further debate as this bill progresses.

Mr HUGHES (Giles) (15:54): I also rise to add a few words in support of the Hydrogen and Renewable Energy Bill. As it says, it is a bill for an act to facilitate and regulate the generation of hydrogen and renewable energy in the state and coastal waters of the state, to make related amendments to the Mining Act 1971, the Pastoral Land Management and Conservation Act 1989, the Petroleum and Geothermal Energy Act 2000 and the Planning, Development and Infrastructure Act 2016, and for other purposes. At the end of the day, it is an attempt to get a coherent legislative and regulatory framework to guide the development of what could be a very major industry in this state.

I am very fortunate to be the member of the electorate that is probably going to be in the epicentre of much of this development. As was indicated by the Prime Minister's announcement yesterday of financial support for an infrastructure upgrade at Port Bonython, $70 million will come from the federal government, $30 million from the state government and $40 million from the private sector.

As people know, Port Bonython has been used as a hydrocarbon export facility going back many, many years now—I think back to around 1980 or 1981—when it started that role with the construction of the gas fractionation plant and the Port Bonython jetty. It is a jetty that is owned by the state. Recently, over the term of the Weatherill government and then the term of the Marshall government, it has undergone some significant maintenance.

I have been an advocate of looking at Whyalla as a hydrogen hub going back quite a few years. I remember in the early days talking about this with some people from the Melbourne Institute. There was virtually no interest. My interest has predominantly, but not only, been because hydrogen is potentially a green source of energy and a reductant for the steel industry. We wrote to 50 companies at the time. I said I could secure the local money, which I did, for a study by the Melbourne Institute. We wrote to 50-odd companies back in 2014, early 2015, and there was no tangible interest in hydrogen at the time, even though people said theoretically it was all very interesting. How the world has changed.

I think it is probably going to be years before we export hydrogen from the jetty at Port Bonython. It might well be that we do not export hydrogen from that jetty. It might well be that, if we are going to export, we export green ammonia, given that we already have shipping fleets, that it is already handled on a worldwide basis and that it is a lot easier to handle than hydrogen. But who knows? I might be wrong. The Japanese have built one ship to transport hydrogen, and we might well see more in the future.

The interesting thing about the Port Bonython jetty—this is a good while back now—is I had informal conversations with Santos about the capacity of the jetty. At that time, the utilisation rate was I think under 30 per cent. I do not think it has increased in any significant way since then, so you already have an existing jetty that has the potential to be used as an export point.

When the previous government called for expressions of interest in relation to Port Bonython, I think they should have gone a little bit farther afield, because if you are going to export either green ammonia or hydrogen there is no doubt you are going to need some ancillary infrastructure in relatively close proximity to the jetty head.

I was in some discussions with some companies that had expressed, way before COVID, some interest in doing stuff at Whyalla. One of these companies was originally going to do stuff near Port Lincoln. I got into a conversation with that company and said that Whyalla is a far more sensible location. Unbeknownst to me, they indicated at the time, 'Yes, we are actually looking at Whyalla in preference now to near Port Lincoln.'

Our discussion centred on some land where, once again going back many years, a titanium dioxide manufacturing facility was going to go. This is about 20 square kilometres of flat, industrially zoned land, and it was my argument with them—and they fully supported the argument—that it would be the ideal place for the hub betwixt the Port Bonython facility and north of the steelworks but closer to rail and closer to the Cultana substation.

When it comes to hubbing some of these hydrogen proposals, I still believe that that flat land adjacent to the road out to Point Lowly makes a lot of sense, as then you would just run a relatively short pipeline out to the jetty and it would be north of the steelworks. Where it is all going to end up in terms of the hub and what the best configuration is will be for other people to decide. I think we still have seven companies that have expressed interest in the hub.

Invariably, all these companies are very large and most of them are overseas companies, with the exception of FFI, big companies, some working in conjunction with smaller companies. As to the scale of what is being proposed, if this comes to fruition, and what some of these companies are proposing, when it comes to renewable energy projects in this state we are used to thinking in the megawatt range. These companies are talking in the gigawatt range, and their interest is in exporting either hydrogen or green ammonia, whether to Europe, whether to Korea, or whether to Japan. I guess the attraction to this country is its political stability and its massive renewable energy resources.

With a lot of the renewables being talked about, companies are looking at areas to the west of Iron Knob in the unincorporated areas on pastoral land. I listened with interest to what the member for Narungga had to say. I would probably argue that the vast majority of those pastoralists, if we end up with these mega wind farms and mega solar facilities, are going to be seriously droughtproofed because they are going to get an incredibly significant income stream from these facilities, as do some of the farms currently available to wind turbines and solar plants—primarily wind farms.

There is a real opportunity here for pastoralists in our state to benefit, but it has to be done in a strategic fashion. It should not be an ad hoc process, where you get private sector duplication, where you get a bit here and a bit there. It needs to be coordinated, it needs to be strategic and it needs to be done in a way that the state can maximise the benefit for the people of this state. That is why this bill is important.

There has been a lot of consultation around the bill, and other people have mentioned the figures. I went to the first consultation with Aboriginal groups at the golf club in Port Augusta, and the place was full. There were all sorts of groups represented, including traditional owners and others, wanting to provide input and wanting to listen to what was going on. I think it was a good step.

Instead of developing a bill and then going out, feedback was obtained and the bill has been developed. It has been an iterative process, and it will continue to be an iterative process to make sure that we get this right for traditional Aboriginal owners and other groups, for pastoralists and possibly for freehold farmers as well, because I hear that one of the big Danish companies has signed up a whole bunch of farmers to exclusivity agreements on Eyre Peninsula. How all that is going to work out, I do not know.

Certainly, the interest of the company that I have been speaking to has been in those pastoral lands to the west of Iron Knob. The reason for the interest in that area is that it is somewhat an unusual area, in that it has a world-class wind regime and overlaps with world-class solar and, as other people have said, there are not many places in the world where you get that combination. That is a real strength for Australia.

Given the history in my part of the world, I am not a person who counts chickens before they hatch. Indeed, we wait for the chickens to hatch and run around a bit before we count them because, when it comes to the manufacture of at-scale hydrogen or green ammonia, this is now a global competition and South Australia does not have deep pockets. Australia does not have deep pockets. We cannot compete head to head with the Inflation Reduction Act in the United States, where various incentives and carrots are going into their hydrogen production. Because the Inflation Reduction Act is such a game changer, I am waiting for the full suite of initiatives that is going to come out of the European community.

Australia has to be smart and the one thing we do have going for us is that we have serious comparative advantages when it comes to our solar resources and our wind resources. The fact that both exist in this state as world-class resources does give us an advantage. As I said before, the whole issue about sovereign risk also plays into that and the vast tracts of land that we have.

We are not proposing that we do this at Anna Creek Station, but I am just going to use Anna Creek Station as an example. The scale of some of this stuff is vast. One of the previous chief scientists at a national level indicated that, if the hydrogen industry were to match the gas exports that currently occur in Australia, the sort of scale we would be talking about would be renewables that would take up in land mass around about 80 per cent of Anna Creek Station—and Anna Creek Station is just one station in my vast electorate—so there is no shortage of room in the north of this state when it comes to especially solar and, in some areas, the combination of solar and wind. So we can do it, but we have to be smart about it.

An indication of being smart is that we talk about 70 per cent renewables in South Australia. South Australia did not pour millions and millions of dollars into getting that industry. It was smart about it. It tweaked the planning laws, it did a number of other things and it put out the welcome mat in a big way prior to the other states through the Rann years and the Weatherill years and continuing on. As a result, we stole the lead from the other states when it comes to renewables. This bill represents that same sort of smartness in being the first in the nation to have the legislative and regulatory environment for the development of the hydrogen industry.

As people are aware, the Prime Minister was in Whyalla yesterday, along with the Premier, and one of the good things about that is that one of the people leading the transition in the steel industry, Theuns Victor, whom I have known for quite a few years now, gave a presentation. Not everyone is au fait with the ins and outs of the iron and steel industry, but it was an excellent presentation to demonstrate the advantages we have in the Upper Spencer Gulf when it comes to the resource base—both the mineral resource base and the renewable energy resource base—and, in the case of Whyalla, a steelworks and a port. It is not just the port in Whyalla itself, which in some respects is two ports, as there is an inner harbour and an outer harbour, but as the crow flies, not too many kilometres across False Bay, is Port Bonython. So essentially you have three port outlets in Whyalla and its immediate vicinity.

One of the really interesting things about Whyalla is the magnetite resources in the Middleback Ranges. A man by the name of Gavin Hobart (someone else I have known for a long time) is right across the geology of the Middleback Ranges. He is charged with the responsibility of developing the magnetite resources, and it is always good catching up with him to have a discussion about what the JORC reserve is.

The JORC reserve is the highest quality reserve. It is a commercial resource that can be exploited that then feeds into the value of the company. In terms of magnetite, it has gone from 650 million tonnes to now a JORC reserve of 1.5 billion tonnes, with billions of other tonnes of magnetite being looked at to move it onto the JORC scale, so there are billions and billions of tonnes of magnetite on the doorstep of Whyalla.

When we talk about magnetite, it is particularly suited for use with hydrogen, and the Middleback Ranges magnetite is especially suited given its grade and quality. We say there is probably nowhere else in the world where you have massive renewable energy resources, a massive magnetite resource, a steelworks and a port all within a relatively short distance of each other and all with some significant infrastructure in place—that is, water, rail, electricity, all the rest of the industrial-grade infrastructure you need. There are very few places in the world that are like that and the advantages are potentially huge.

If we do want to transition the steel industry, this bill is going to be important. When we get beyond the tonnages that we currently produce in Whyalla—and we have the potential to do that—it might be exported in the form of green iron briquettes. We can do what we have always done: intermediate steel products and finished steel product, all potentially green. If we ultimately use hydrogen, we are talking about large-scale renewable energy projects in the gigawatt range.

As I said before, I do not count my chickens before they hatch, but I see the transition in Whyalla and I see the investment that is going to happen in the electric arc furnace. The deposit has been paid to Danieli, so we are now on the waiting list for those orders to be delivered on. The next step is direct reduction iron-making, which can use syngas as the energy source and reductant agent, and increasing the use of hydrogen so that over time we might well move to close to pure hydrogen in the metallic iron-making process. That totally greens up the process.

What we have to do is be able to demonstrate that we can produce hydrogen at scale—and that is going to be the challenge. When you speak to the steel industry, when you speak to other industries, the threshold is around $2 a kilo. That is what they are looking at. Every tonne of iron you produce is going to require 90 kilos of hydrogen as a reductant and an energy source. So potentially the future is bright, but there is going to be a lot of hard work getting there.

Time expired.

Ms HUTCHESSON (Waite) (16:14): I rise today to speak in favour of this bill, and what a beautiful day it is today, wouldn't you say? The sun is shining, there is barely a cloud in the sky and the birds are happily chirping away, at least they were at my place this morning. If I could get my solar inverter to talk to my wi-fi, I could tell you how much energy I am exporting to the grid. Sadly, internet up my way is not great, so we will just have to guess that one.

Last week, I had the absolute privilege of visiting Innamincka on a field trip with the Natural Resources Committee, and I say 'privilege' because Innamincka is an incredible place. We flew up there in a very small plane, and to be honest there were moments when we all felt a little squeamish, but a quick look out the window at the amazing scenery and health was restored. When we arrived, it was hot, 36° of dry heat and the wind was blowing a bit of a dust storm.

I had never been that far north before. It is desert in the true definition of the word—sparse vegetation, coolibah trees, some shrubs and not much else—but what a place. A quick shout-out to Michelle at the Innamincka pub for putting us up for the time we were there. But why am I talking about this now? It is not football, I know. The endless sunshine and the wind: it is an important resource that we have here in this state. Because we know that, and because we are here in South Australia and we have the ideal climate, landscape and resources to be a renewable energy superstar, we need to do more.

We know that on days like today and what we had late last week, we can almost power the state on sunshine; in fact, once the weather starts really heating up and the winds blow throughout the storm season, we can produce too much energy for our grid to handle. Since early in the 21st century, South Australia has sought to harness its abundance of coincident solar and wind resources to substantially reduce our dependence on traditional energy generation and increase the prevalence of renewable energy, but now we face a bigger problem. It is a good problem, but it is one that sees us sometimes having too much.

Unlike those opposite, though, our government is moving to harness the excess energy that our grid can be overwhelmed by, rather than just reaching in and turning off the solar panels. South Australia currently generates 70 per cent of its energy from renewable sources, but this is not enough. In order to meet our commitment of net zero carbon emissions by 2050, we need to do more, much more. We know that our state is absolutely ready to meet the challenge. We have the resources and we have the government that is ready to do what needs to be done to drive the transition.

The Hydrogen and Renewable Energy Bill brings together six different acts, creating a national-first legislative framework that will not only minimise red tape for investors but ensure as a state we only look to projects that are willing to embrace coexistence with current land uses and deliver community and environmental benefits. While existing frameworks have served the state well, it is clear the world is headed for a new wave of large-scale hydrogen and renewable energy development, and we need to be ready for it.

This change in scale and complexity demands a single end-to-end framework that can consider the needs of environment, landowners, communities and the state's strategic and economic ambitions. Providing one consistent framework across the state through this bill will provide investor certainty, economies of scale and efficient development and regulation of the growing sector. It will also ensure responsible development, operation and eventual decommissioning of this significant infrastructure.

With the possibility of more than $20 billion of projects in capital development, including our own hydrogen electrolyser and hydrogen-fuelled power plant and storage facility along with Northern Water, this bill not only seeks to give confidence to international investors who are willing to contribute their capital to growing the industries of the future right here in South Australia but at the same time it gives communities confidence that these projects will be delivered in ways that protect the environment and the interests of community, landholders and native title holders.

Five licence types will be created relating to the key stages of renewable energy projects, from the early research and feasibility stage right through to the construction, operation and closure of facilities. These include:

the renewable energy feasibility licence/permit, which enables exploration of renewable energy, including construction of monitoring equipment;

the renewable energy infrastructure licence, which will permit construction, operation, decommissioning and rehabilitation of renewable energy infrastructure;

the renewable energy research licence, permitting construction, operation, decommissioning and rehabilitation of renewable energy infrastructure for the purpose of researching the capabilities of a technology, system or process;

the hydrogen generation licence, which permits construction, operation, decommissioning and rehabilitation of hydrogen generation facilities; and

the associated infrastructure licence, which will permit ancillary infrastructure (transmission, roads, water treatment) and the associated facilities (the hydrogen power plants, the ports for hydrogen product export and desalination for hydrogen production).

The bill has been subject to extensive consultation over the past year, including with native title holders. Ensuring that native title is not only protected but treasured is important. While we were in Innamincka, I had the honour of meeting Rob Singleton. A Yandruwandha Yawarrawarrka man (YY for short), Rob is the Director of the YY Traditional Land Owners Corporation, who provide advice to National Parks regarding the co-management of the Innamincka Regional Reserve.

Rob spoke to us about land management and the work of the nearby Moomba gas plant. He advised that this work is now more aware and considerate of the significance of the land and the sites that hold incredible stories and history. He took us on a walk to visit a sacred site that is especially important to men and boys of his clan. The rock carvings at this site were likely to be at least 15,000 years old. Their significance is priceless, and it is why this bill protects native title and forms an important step in the process.

Projects on native title land will require native title agreement before activities can begin. Where native title exists in relation to an application for a renewable energy feasibility licence, renewable energy infrastructure licence, renewable energy research licence, hydrogen generation licence, associated infrastructure licence and a renewable energy feasibility permit, another important precondition for these licences being granted will be included.

These licence types will not be able to be granted in relation to land where native title exists, or might exist, that is the subject of native title determination or within the registered native title claim unless the registered native title holders or claimants have consented to that grant in an Indigenous land use agreement under the Native Title Act 1993. To provide flexibility for native title groups, provisions enable a less formal type of agreement to be negotiated if valid under the Native Title Act, and only at the request of the native title group.

In keeping with the bill's object to maximise economic opportunities for Aboriginal people, the government will also develop guidelines to support leading practice engagement and negotiations. Additionally, the establishment of a hydrogen and renewable energy fund comprising money that can be used for purposes related to the objects of the act also includes the protection and preservation of native title and Aboriginal heritage in South Australia.

Protection of the environment is also an important part of this bill. Proponents must properly manage and minimise any activities that have actual or potential adverse environmental impacts and manage and minimise risks of significant long-term environmental damage. To demonstrate this requirement, proponents must undertake, consult on and publish an environmental impact assessment. Environmental impact assessments include a statement of environmental objectives setting out measurable environmental objectives, which is provided to the minister for public consultation and approval alongside an environmental impact report.

This bill provides an opportunity for South Australia, but it also has the necessary protections for native title, for the environment and for the communities. Landowner rights have also been enhanced under this bill to ensure the sustainable coexistence of industries into the future. Before any activities on Crown land can begin, licensees will need to enter into an access agreement. Before any activities on freehold land can begin, licensees will need the consent and approval of the landowner.

The bill provides improved dispute resolution mechanisms, landowner support through the expansion of the Landowner Information Service and various access arrangements that will facilitate negotiation and conversation regarding collaborative uses of land. The government will continue to work with all stakeholders and rights holders to develop the associated regulations and to move forward in identifying the first release areas for competitive tender under this framework. The bill also includes review provisions requiring a review to be initiated five years following the commencement of the act and every five years thereafter.

As already mentioned by me and many of my colleagues in this place, SA is set to be a world leader in renewable energy, and this bill goes a long way to establishing a framework that will make it straightforward for investors. We already have huge investment and it is only going to grow with our Hydrogen Jobs Plan. The opportunity for Whyalla to lead the country, if not the world, in this is an incredible outcome for this town and the towns around it, and I look forward to seeing them continue to blossom.

I would like to take this opportunity to bring the conversation about renewables right back to my own electorate where I started this conversation and congratulate the City of Mitcham, who recently won not one but two national climate awards at the Cities Power Partnership Awards. They won the Community Choice Award and the Renewable Energy Achievement Award for their groundbreaking community renewables program which, as I understand it, is an Australian first.

With over 780 residents already benefiting from the program that is supported by a bulk-buy solar panel and battery project, they are helping to reduce carbon emissions and providing an affordable option for everyone who wishes to have the benefit of solar, not only for their budget but for the environment. A big congratulations to the council and Mayor Heather Holmes-Ross for this achievement and leadership in the renewable sector.

Our state has so many opportunities, and renewables is a big one. We are becoming known worldwide for our commitment to lowering emissions, and that is something we can all be proud of. I commend the bill to the house.

Mr PATTERSON (Morphett) (16:25): I rise to speak on the Hydrogen and Renewable Energy Bill and indicate that I am the lead speaker for the opposition. Having said that, it is talking about renewable energy and this side of the house also made clear when we were in government, and now with our leader, that we are willing to work hard in this space, supporting renewable energy and also green nitrogen. When we come to this act, of course, we look at it with that lens because we see the opportunities there are in South Australia, which I will speak to later on in my contribution.

At the same time, we recognise that it is looking at rolling out both hydrogen generation and associated activities and also renewable energy over all of the states and trying to bring it into the one bill. We need to make sure that landowners' rights are not overridden as we go through this process because we do need to understand and recognise the long-established rights of landowners, freehold landowners, and also landholders, who include pastoral lessees.

If you look at the pastoral leases in South Australia, they take up a big swathe of the land that we have here. It is land that the government does not have to tend to. That is done by the pastoral lessee and they obviously use that land for food and fibre, running stock and cattle through there. It requires high skill to be able to do that. It is quite arid land and they have to really look after that land as well. They work closely with native title holders to produce a really significant economic impact out of those pastoral leases.

I have been watching the consultation process on this bill, and it has been spoken about by others in this debate. It has been a fulsome process. It has been going since the end of last year and ultimately led to the bill arriving in parliament at the end of the last sitting week, on the Thursday, and here we are, debating it on the next day of sitting.

In terms of the opposition, it is an important role of democracy, of course, that the opposition is given a good opportunity to understand bills and, certainly, to consult with stakeholders as well. Again, I am acknowledging consultation that has been done, but it is important to be able to scrutinise legislation. This is an important piece of legislation and we need to give stakeholders the opportunity to raise those issues with the opposition.

It is a technical bill and the final bill that landed in parliament was 92 pages in length. If we compare that with the draft bill that was consulted on, that was 68 pages, so additional regulations and legislation have been put in. In my brief time talking and consulting with stakeholders, it is apparent they have not had time to understand what the differences are, necessarily, in the legislation. Some of that might actually be there to address their concerns. That is something that, of course, we would want to see in this parliament, but for others maybe their concerns have not been addressed in the legislation and they are keen to understand if it can be addressed in other ways. Hence the need to consult widely.

This, as I said, has come back into parliament quite quickly. That is certainly the right of the government—we understand that—to be able to push their legislation through at the speed that they so wish, but we would like to make sure that it can be scrutinised properly, that there are no unintended consequences and that we get it right.

I have spoken with the minister responsible for this, the Minister for Energy and Mining, about whether we can discuss this at the second reading stage this week in parliament and then look to go into committee, because no doubt there will be questions that have to be asked to try to flesh out some of those issues from stakeholders. We will look to go into committee in the following parliamentary sitting week. The minister said that he is open to that, and we think that is a good result in terms of being able to give this bill the scrutiny that it needs and to make sure that its passage goes through without unintended consequences.

Having said that, I have also received a briefing from the department yesterday. I thank them for that. It was quite a lengthy briefing, and we did it over two stints—I am still waiting on some information to come back from that, but I have not checked my email in the last hour or so—and I do not have all the information. Under the circumstances, where the government is prepared to go into committee in the following sitting week, we are prepared to make some initial comments to help inform debate and to move it along.

At the outset, I made the point that this side of the house supports renewable energy and clean hydrogen. We certainly understand that there is a role for that, and I think the proof was definitely when the former Liberal government was in government. We continued to look at increasing the amount of renewable energy penetration. On average, I think it went up from about 45 per cent to over 60 per cent in those four years. At the same time, mindful of the fact that, while renewable energy has strengths, there are also real issues around its impact on the grid stability as well.

There was also a lot of time put into making sure the grid stability piece was there as well, just to make sure that in fact there is an orderly transition—you can just let a plethora of intermittent energy come into your system, but if it is unmanaged the consequence is that your system becomes unreliable and causes real issues with other forms of generation, base load generation, that actually contribute heavily to stability—and that this transition occurs with a real mindset on affordability.

As I have said previously in the chamber, that certainly was the case on this side of the house, when we saw prices go down over those four years. I have quoted before that ESCOSA reports show that prices went down $421 between 2018 and 2021 after seeing a sustained increase on coming into government. Prices before we came into government had gone up by $477 over the previous four years. Now we are back in the situation where we are seeing prices increase as well. The latest ESCOSA report shows that the prices again are on the increase and have gone up over the last 12 months by a significant amount, upwards of $200, and that is a real concern.

At the same time, the Australian Energy Regulator released their default market offer, which has seen prices again look to go up. From 1 July, we saw big increases in the average household bill under that default market offer of over $450. The same thing is happening with businesses as well, which is really concerning. The default market offer for businesses saw price increases of over $1,300. This is a massive amount—and that is on the average bill.

Talking to businesses, if they are more electricity intensive, those bill increases are even more. We have seen cases of small businesses where their electricity bills have gone up by nearly $1,000 a month. There has been energy bill relief of $650, but that is soon gobbled up. The bill relief is there for the first 20 or 25 days of that company's operation, but then after that, for the rest of the 330 days the business operates, it is facing these massive electricity bills.

As we talk about the renewable energy going into this state, it really is incumbent on us to have the price front and centre of our discussions because it impacts people, in a very real sense, at the same time as they are having to go through a cost-of-living crisis. We have seen the compounding effects of inflation, whether on food bills, grocery bills, petrol or fuel, and interest rates as well are causing big rises and taking money out of people's ability to spend. It is a compounding effect, and on this side of the house we are certainly very mindful of that and mindful of having a transition that looks with a keen focus on price so we do not get inequality throughout society, where we have those who are in energy poverty because of the sheer cost.

At the same time, we are also making sure there is equality throughout the state so that the burden of the renewable energy transition does not fall just on the regions, when a lot of the energy consumption in South Australia occurs in the city of Adelaide. By population, it is a massive percentage—1.3 million people here in the city compared with the state's population of around 1.8 million. Again, we want to make sure that an unfair burden does not fall on the regions.

No matter where you go, the regions are also very engaged. They see the benefits of renewable energy and what it can do for their communities: it brings investment into their communities, it brings jobs into their communities and it also helps them in terms of reducing emissions in their communities as well as in the wider state. They are certainly mindful of that, but they are also mindful because they are very lucky that they live in such beautiful environments. They really care for their environment and their biodiversity as well, and they do not want to see that lost as we go through this process.

It really is a complex transition we will have to go through and at a scale that is huge. What we need to move away from is thinking that there is only one silver bullet to solve this. We need to have all technologies available to us that can help move where we want to go in terms of being net zero by 2050. It is incumbent on all of us to look through that—that is, rather than just going down a renewables-only path, we really need to make sure that the energy system is stable, it is reliable, it is resilient and, most importantly, it is affordable as well.

Of course, when those on this side of the house were in government, we realised that one of those technologies in the mix is clean hydrogen. We readily acknowledge that, and in terms of its technological evolution it really is a fuel of the future. We know it has potential, but it is going to take time to develop that potential, and we also have to be mindful that it is not a silver bullet. There are certainly uses for it, especially in those industries that are hard to abate, and there are complexities in terms of transporting it, so we have to be mindful of that in relation to the best technology to use in a certain situation to try to make sure that emissions are abated in a cost-effective manner.

In terms of clean hydrogen technologies, there is green hydrogen, where we use renewable energy via an electrolyser to produce hydrogen. Alternatively, you can provide low-emission hydrogen through natural gas, splitting off the hydrogen, capturing the carbon through that process and putting it underground via sequestration and creating clean hydrogen. Both those opportunities exist in South Australia. In Moomba, Santos provide a significant amount of gas for not only South Australia but Australia. They certainly have the opportunity for carbon capture in some of their old disused gas wells. We have that there, and we also have the opportunities for green hydrogen.

Recognising those opportunities for clean hydrogen, the former Liberal government announced the Hydrogen Action Plan back in September 2019 on how we could capture an opportunity for hydrogen here in South Australia. That included a hydrogen modelling tool as well, which gave investors the ability to look at and work through where prospective areas might be, to do some desktop studies around the opportunities in South Australia and get their interest in what those opportunities were for the state. The plan also looked at 20 other key actions across a number of areas to help scale up hydrogen production, whether it be for domestic consumption, because there are certainly opportunities domestically and maybe longer term for export as well.

Another significant project in terms of green hydrogen, which I talked about before, was opened back in 2020 by the former Liberal government at Hydrogen Park SA in Tonsley—that is, the 1.25 megawatt electrolyser that looks to create hydrogen at Tonsley and then blend it into the natural gas line and send it through to homes in Mitchell Park. That was a good demonstration of what the opportunities are here in South Australia and certainly showed what is possible going forward.

We know there are significant opportunities. I have said in the parliament before that South Australia has a great percentage of Australia's wind and solar generating lands. In a number of these locations, those resources of wind and solar are coincident. There was the opportunity to look to do what was done at Tonsley at a larger scale further north, where a lot of those wind and solar resources are. Of course, Port Bonython is a fantastic location.

We did a lot of work in government trying to bring some globally significant players and suppliers in the industry around the table to participate in the hydrogen hubs program that was running. This looked ultimately to have a bid of $146.5 million put into it, led by the former Liberal government, to bring together global industry leaders to bid into the federal government's hydrogen hub. In November 2021, that was put in, and ultimately the federal government approved it back in 2022.

Both the state Liberal government at the time and the former federal Liberal government accepted this hydrogen hub as a fantastic opportunity for South Australia, so it was very interesting that only yesterday we saw Prime Minister Albanese and the Premier fly to Whyalla to effectively announce that they were going to go ahead with this proposal that was announced back in April 2022 by the former Liberal governments. So the question is: what has actually been happening in those last 18 months?

Certainly, what would be hoped to be happening is those big global players that were interested back in 2021 and 2022 are still committing to that because while the bid entailed a $70 million contribution from the federal government and a $30 million contribution from the state government—which we heard reannounced yesterday—it also included further funds of $40 million from those private companies, the globally recognised industry leaders in this space: Santos, Fortescue Future Industries, and Origin Energy.

It also included some significant international companies coming from Japan and Canada, whether that was Chiyoda, ENEOS Corporation, Mitsubishi Corporation or Amp Energy. They also saw the opportunity, as did the former Liberal government, of what this could do. They were backed by significant amounts of funding and the idea was to build this out in stages and to look initially at some Common User Facility at Port Bonython. Focused around the Port Bonython precinct we have the jetty, a massive infrastructure that Santos use for their exports and there is the ability to bolt on to that in terms of the Common User Facility.

As I said, these companies would look to grow and build this out in stages. Potentially, they will bring billions of dollars of investment to the table down the track and have the opportunity to produce a massive amount of green hydrogen through electrolysis, looking to generate up to 1.8 million tonnes of hydrogen per annum. That is what was reannounced yesterday in the press release. It seems that that is looking to be progressed. On this side of the house, we would say that speed needs to quicken up to progress that even further.

There is also the opportunity for hydrogen to be produced from the natural gas at Moomba and be sent down to Port Bonython and, effectively, you would have two sources of hydrogen. This would help in terms of the cost and the competitive curve for that hydrogen, especially with the quantities of natural gas that Moomba produces, to allow that hydrogen to compete with traditional fuels earlier and to look at how that can proceed.

There is terrific opportunity up there, not only in and around Port Bonython but, of course, as has been spoken about in terms of Whyalla, Port Pirie and Port Augusta. The opportunities for Whyalla and the potential for hydrogen were very much on the radar when we were in government. The potential to use magnetite and hydrogen for green steel is certainly a great opportunity for Whyalla. We saw the continued interest in that yesterday and, as has been spoken about by others, that will certainly help going forward.

There was emphasis in terms of the opportunities for hydrogen, knowing that it is going to require massive investment to actually be able to get off the ground, but if that investment is forthcoming it will certainly have a massive impact not only on the Upper Spence Gulf economy but ultimately the state's economy as well. The approach was to work with these big global industry players to try to develop that hydrogen industry.

What we see with this government is more of a 'go it alone' approach. They are looking to spend $600 million of taxpayer funds on what is an experimental hydrogen power station, which, as their own policy document claims, is only intended to reduce electricity costs for business and, even then, not until 2025. This is really concerning in terms of households that are currently experiencing surging and skyrocketing electricity prices.

When the Premier was asked how the hydrogen power station was going to help households and whether it will bring down their household electricity bills, his response was that it will bring down emissions. At a time when we need to be looking at how we can bring household electricity prices down, this is further cause for concern.

As I said, the costs of bringing these big hydrogen power projects online certainly are significant because of where the industry is at the moment and are still to be worked out. Certainly, that appears to be the case in terms of when the government put out their request for proposals for this power station, rather than the 3,600 tonnes of liquified hydrogen storage that was their promise at the election.

We see that this has been dropped in favour of a much smaller amount of storage. No doubt that is driven a lot by costs because, while the government's policy document stated that the cost for 3,600 tonnes of liquified hydrogen storage would be only $31 million, in fact it will probably be at least 10 times that going on the modelling by the CSIRO that is available. These things are costly, and we can see that in terms of how their project is rolling out as we go along.

That was one of the main pillars of their plan. The other one was that it would be a base load combined cycle turbine. There are questions around how that is going to roll out now that we have such reduced storage and certainly whether we are going to see a base load power station as well. It speaks to the fact that this industry is new. It is going to cost a lot of money and certainly the taxpayers of South Australia are having to bear the risk of this. There is certainly great expertise in industry, and no doubt shareholders should be the ones bearing a risk as well. As we go forward, we will certainly be making that case.

The approach on this side of the house was to work with those experienced industry leaders to establish Port Bonython as a domestic and international hydrogen export centre. The other aspect that came out of that as well is signing a memorandum of understanding with the Port of Rotterdam, which was done by the former Liberal government. Of course, the Port of Rotterdam is a massive port that imports energy and gas into Europe. With what has gone on with the war in Ukraine, Europe is having to look for other sources for their energy and the Port of Rotterdam is certainly one of those areas where energy will come in and there is great interest in that regard.

That said, with all the opportunities I spoke about, what was going to drive those big investments would result in investments not only in hydrogen generation but backed by renewable energy infrastructure. A lot of that land was looking to the north to the pastoral districts, which this bill countenances.

Having said that, back in August 2021 the former government looked to regulate hydrogen. It was going to do so through the Petroleum and Geothermal Energy Act, which came with the concept of a hydrogen generation licence and looking at regulating hydrogen when it was there for commercial purposes, whether that was for export, manufacturing chemicals, for wholesale distribution or for generating electricity. That was to be regulated if that hydrogen was produced by either electrolysis or re-forming of natural gas.

When you look through the basis of this bill, you can see that work that was done looking to regulate hydrogen generation has been moved across into this bill that we speak about now. We understand, though, that hydrogen at scale relies on significant international investment, and ultimately export markets to go with that international investment. That certainly will take some time to build out at scale. I think we need to be realistic about that.

Hydrogen itself is much less dense than natural gas, so in terms of being able to transport it around, the size and scale of ships that would be required to transport the equivalent amount of energy are a lot bigger and really, at this stage, are certainly not cost-competitive. We need to be mindful of that—certainly we were in government—and look to other ways to encourage the rollout of renewable energy and making sure that the grid is stable.

As I have spoken about previously, another area of focus by the former Liberal government was to fast-track the construction of the South Australia-New South Wales interconnector, which looked to provide 800 megawatts of capacity between those two states. That would have then allowed South Australia as a state to export its excess renewable energy, certainly in times of high generation in South Australia, whether that be by sun or by wind.

It would also have provided stability and reduced the state's separation from the National Electricity Market, which we saw back in November last year when that storm came through and knocked over the Victorian interconnector and the issues that caused here in this state. That is certainly one reason for having the interconnector, to be able to provide that redundancy. It also gives the opportunity for renewable energy to be exported across, which helps to attract investment.

One of those examples I have spoken of before was Neoen's $3 billion Goyder South project, which had a range of wind, solar and battery capacity. Neoen have said that two-thirds, or $2 billion, of that investment at the Goyder South project would rely on having the SA-New South Wales interconnector in place. In fact, their managing director said that Project EnergyConnect is vital to unlocking the full potential of Neoen's multi-gigawatt Goyder renewable zone and the significant jobs and investment it represents for South Australia. That was one project.

Of course, there were other projects. I talked about Amp Energy in terms of the Port Bonython Hydrogen Hub. They had a massive project as well, looking at over $2 billion. All-up, there was significant investment in renewable energy that was either in the planning process or that had been approved.

In terms of where a lot of that renewable energy is at the moment, it is on freehold land. This bill looks at regulating renewable energy and hydrogen generation on both freehold and designated land. We certainly will look at that further on. Those projects I mentioned, and all of the others, have progressed through the existing system, which goes through the planning and development act to get approval. That has seen, as has been spoken about, a rollout of renewables in this state that has about 70 per cent of the state's electricity on average met by renewable energy sources.

The preliminary feedback I have from stakeholders throughout this is that the system is working at the moment, certainly on freehold lands, and they do not want to see a new regime or framework come in that is a backwards step. Part of the consultation process is seeing that that is not the case. At the moment, how it works is that landowners come to an agreement with a renewable energy company that is looking to put wind or solar on their lands. Part of that agreement is being able to access it, of course. Another part is how much the renewable energy company is prepared to pay in terms of either a rent or a lease to get a right of access to the freehold landowner's land.

Once they have that in place, they can then take their proposal through the planning process, which, as I said, is the Planning, Development and Infrastructure Act. At that stage, they will pay an application fee in the hundreds of thousands. It is significant, but that is commensurate with the scale of these projects. That then has to go through the proper approval process, making sure the environmental impact is satisfactorily dealt with and that the public consultation is there as well before ultimately a decision to approve or not approve is taken.

What the stakeholders are saying is that, if the approval is to be done through the hydrogen and renewable energy act, they still want the ability for private owners to come to commercial arrangements with these renewable energy companies without government intervention. Certainly, they want the rent paid to them and that to be retained as well, not for the government to try to step in and also claim rent. I am not saying that is the case; I am just setting out what their expectations are.

I will also talk a little bit about what the existing system is in the pastoral districts. At the moment, the pastoral land management act deals with how those pastoral lessees can manage their lands, and it does give consideration to wind farms and solar farms. Having said that, there are none actually in operation at the moment. Taking the process through from start to finish where we actually have an approved wind farm has not occurred, but certainly in terms of the pastoral land management act, it does consider wind farms.

The way it does that is the renewable energy company would have to get rights to access the land of the pastoral lease and also deal with native title, then whatever agreement is made between both the native title holders and the pastoral lessee results in agreements being in place and allows a minister to ultimately go through an approval process. It is stipulated in the pastoral land management act that 95 per cent of payments made by the renewable energy company when they go into the pastoral land fund is paid out to both the pastoral lessee and the native title holder. That is the regime that is in place at the moment prior to this bill, and certainly the pastoral lessees are working with it at the moment. They certainly have questions around that that we can touch on later on.

The system also allows for multiple bidders to effectively come to a pastoral leaseholder should that area of land the pastoral lease is on be able to be highly prospective. Then at least it gives the pastoral leaseholder, the native title holders, the ability to work with different proponents and ultimately select one prepared to work best with them, whether that is how they would basically get access to the land, the relationship they would have with the leaseholder in terms of road access, management of the water right through to potentially what they would be prepared to pay for having a wind farm there.

Pastoralists welcome the flexibility of being able to have the potential for wind farms or solar farms on their pastoral lease. They are also looking at what can be done from a conservation point as well, seeing opportunities to coexist. They see it as another way to supplement their income and help them, and that then in turn helps in terms of resilience as well. Pastoral land is susceptible to drought, so there are obviously years when there is drought and there are years when there is better times, so income is up and down for the pastoralists. The opportunity to even that out a little bit by having a supplementary income stream such as could be provided by having a wind farm is certainly very attractive for them.

As I have said before, they are certainly happy about and mindful of the fact that the state and the country need to reduce emissions and that they have a role to play, but, equally, it also helps them in terms of their operations and reducing the emissions of their operations. They are looking to coexist with renewable energy companies and renewable energy infrastructure, potentially with hydrogen as well. What they do not want is have their rights diminished to such an extent that they are not afforded the recognition of the important role they have in this state, the important role they have had in building this state and, going forward, the important role they will have to continue that benefit.

That is my understanding of where it is at at the moment. It has helped inform me, in terms of the discussions with stakeholders, and understand where they are at as well. If we talk through the briefing I received from the department and understanding what the bill entails, we can then go through a few other discussion points after that. As has been said by other contributors to this debate, the Hydrogen and Renewable Energy Bill is looking to introduce a new system that will allow the state government after consultation with stakeholders—whether that is native title holders or state government agencies—to explicitly put in the legislation 'declare designated land'. The bill gives a definition of what that designated land is: it is pastoral land, but it is also prescribed Crown land.

The Crown actually owns significant parcels of land. The Minister for Environment is in charge of the department with the biggest landholding within the state—and of course there are other state government agencies—and also state waters, where there is the opportunity for offshore wind and other potential renewable energy opportunities, but principally offshore wind.

These designated land areas can be declared release areas by the minister, of course based upon their suitability for operation of renewable energy infrastructure and hydrogen generation. That definition of designated land, those release areas, excludes freehold land. It also excludes areas in the Arkaroola Protection Area, which is a very important area in the state—very historic and certainly in need of protection—marine sanctuary zones in those state waters and reserves within national parks.

Again, it is important that we look after national parks and that there is that balance, the importance of the biodiversity effect and the environmental importance of these parks compared with the environmental importance of renewable energy. There are also wilderness protection areas. I think it is important from an environmental perspective that there are these exclusion zones.

Certainly, in the initial discussions the pastoralists have concerns that there are no legislative requirements specifically mentioned as part of the consultation process that is envisaged around these release areas, either in the lead-up to them being investigated or ultimately in the decision that they are declared a release area. Also, the Pastoral Board is not consulted as part of the process. In terms of the legislation, it prescribes that the minister is only required to consult with the minister with responsibility for the pastoral land management act, and so we will need to flesh that out, and I will touch on it again a bit later. These are just the initial areas.

Once that release area has been declared, it is the intention of this bill that a competitive tender process will be run, initially for feasibility licences, and this will be based on a selection area. The briefing from the department yesterday said it was aiming at prioritising projects that embrace a multi land-use framework and that provide community and environmental benefits. Of course, that is worked out through regulations or guidelines, but that is certainly an area stakeholders have talked through around that selection process.

Ultimately, once a release area has been designated the next aspect to it is the licence types of renewable energy and hydrogen infrastructure. Five licence types are to be created for key stages of these renewable energy projects, from the early research and feasibility stage right through to the construction of it, the operation and eventually the closure of facilities.

Just briefly, these licences include the renewable energy feasibility licence and the renewable energy infrastructure licence, which is geared around permitting construction, operation, decommissioning and rehabilitation of renewable energy infrastructure. There is the renewable energy research licence, which is geared around giving permits for construction, running operation, decommissioning and rehabilitation of renewable energy infrastructure which has the purpose of research, to try to understand new technologies.

Another licence is the associated infrastructure licence, which is around permitting ancillary infrastructure to renewable energy infrastructure, potentially transmission lines, roads, water treatment or associated facilities, such as hydrogen power plants, ports for hydrogen export or even desalination of water for the hydrogen production.

Certainly, that associated infrastructure licence has been added. That is a change from the draft bill to the bill we have before us. There were some questions around that from stakeholders, and we will look to flesh that out in the committee stage but still get feedback from them. The final licence is the hydrogen generation licence, which permits construction, operation, decommissioning and rehabilitation of hydrogen generation facilities.

For all intents and purposes, this draws heavily on the concept of a hydrogen generation licence that was put into the Petroleum and Geothermal Energy Amendment Bill back in 2021 by the former Liberal government. Ultimately, that did not progress through parliament before the state election, so now we see it drawn in here. It is interesting that in the definitions in the bill generating hydrogen means:

…undertaking operations to create hydrogen (and any compound of hydrogen necessary for its processing, storage or transport) by processes such as electrolysis of water or the reformation of natural gas…

Again, that talks not only to the potential I spoke about previously but also to the fact that, in terms of hydrogen generation, it looks at producing hydrogen not only from renewable sources but also from natural gas, which you would say is a non-renewable source but, by carbon capture, can convert that to clean hydrogen. Both those forms of hydrogen are in the bill, and certainly that gives the state more options and more ability to move forward in this space. I think the feedback from most quarters is that it is a good thing it is in there, and that has continued on from 2021.

Another licence in there that is over and above the standard five licences is what is known as a special enterprise licence. According to the department, this is provided to facilitate the establishment, development or expansion of hydrogen and renewable energy enterprises of major significance to the economy of this state. Importantly, where those other licences were for designated land primarily, the special enterprise licence can be granted in relation to both freehold land and non-freehold land and state waters, and we will touch on that. There are certainly questions that have been raised by stakeholders in this process around that and that we can certainly touch on further.

As I said previously, in terms of freehold land, those freehold landowners and stakeholders involved certainly were keen that the existing regime or the ability to put renewable energy infrastructure on their freehold land principally was maintained in a one-for-one move from the existing regime to what we see here. From what has been explained in the briefing, and what we can see in the bill, it certainly seems that on freehold land renewable energy proponents will need to secure access to land through direct agreement with landowners, which, from what I can understand, will act to preserve the existing arrangements.

Effectively, if the freehold landholders do not want to see a renewable energy project, if they are approached by proponents they do not have to say, 'Yes, we will take it.' The ability is there to say no, and then the process finishes because there can be no licences awarded without a direct agreement in place, and the right to access land, I think, is the way it is worded in the bill. In the case where freehold landowners are happy for a renewable energy project to go on their land—again for the same reasons I have spoken about the pastoralists—they understand the opportunities there are not only for themselves but for the state in terms of being able to build these out.

How that has worked, in my understanding between what was first countenanced and what has resulted in the initial bill, is that feasibility activities on freehold land are able to continue. They do not need to have a renewable energy feasibility licence to proceed. They can go about initially doing the basic understanding and feasibility on a freehold landowner without having to have the government saying yes via a licence. They can go ahead and do that.

However, should they get to the stage where they want to put up masts and the like, the process at the moment through the Planning, Development and Infrastructure Act is that they have to get an application for that and, because these masts are quite tall, they need to have planning approval. Instead of that, the department informs me that is done through a renewable energy feasibility permit, I think it is called—through a permit nonetheless. From that perspective, it is similar to the previous regime.

The other aspect in terms of freehold land is they do not have to be declared in a release. They do not have to be part of a release area to go ahead, so freehold land again allows renewable energy to go ahead, based more upon what private companies are prepared to look at and in a less controlled manner than the government is trying to implement on designated land.

As I have mentioned, for all intents and purposes the existing freehold landowners have the same rights in this bill as before, except for instances where a special enterprise licence can come into effect. What that can mean is that if a minister going through the process declares a renewable energy project or hydrogen generation to be of state significance, there is the ability for that to be a mechanism for this infrastructure to go on freehold land. That is something that I think will draw out concern amongst freehold landowners. We need to consult more with stakeholders around this because this would mean that renewable energy proponents could get access to freehold land via this special enterprise licence. I will touch on that further on in the contribution.

Referring again to freehold landowners being able to come up with commercial agreements with a private company, data collection is not a requirement for freehold land. There were concerns that, through a licensing regime on freehold land, the data being collected would have to be provided to government. That is quite sensitive data and it costs a lot of money for these companies to go through that feasibility stage, so the feedback from the renewable energy industry was that they were opposed to data collection having to be given up to the government during the feasibility stage on freehold land. In terms of dealing with freehold land, we can touch on those concerns again later on.

Pastoralists are tied up in this area of designated land and release areas, and I spoke before on the process there. Once a release area has been declared, there will be a competitive tender. My understanding is that, in terms of consultation with the various stakeholders, landowners and landholders, the pastoralists will hopefully be included in that process. It is not in the legislation itself, but that will be required to be worked through, as will consultation with native title. Certainly, at the other end, once tenders are awarded, there is the opportunity for a licence to be awarded. In the case of this bill, it goes to one proponent via a renewable energy feasibility licence, which provides for one renewable energy company to do the feasibility study.

Again, we talked a little bit about data collection. My understanding from the briefing is that, while that is going on, that data is able to be retained by the renewable energy company and certainly while they hold that licence. I understand it is in the interest of the state to try to get as much data as possible because that helps inform other potential release areas, but there is a balance between the commercial sensitivities and the renewable energy companies putting that time and effort in.

The other aspect is that, because only one company has the renewable energy feasibility licence, ultimately if they decide to go ahead and move to the next stage to have a renewable energy infrastructure licence or hydrogen generation, they have to have had the feasibility first-up, so there is only one company that can go through that. Certainly, pastoralists have concerns. Where previously they could deal with potentially multiple interested parties for their particular pastoral lease, now that only one company has that licence there is therefore a reduced and diminished negotiating potential for the pastoral lessee.

The concerns that have been raised with me initially are that this may result in a reduced leasing fee because of that ability to negotiate. Hopefully, that is not the case, because when the pastoralists are consulted they can have a bit of buy-in in terms of being able to manage that, but that is one of the concerns. They also have some concerns around the rents that could be paid because of that, not only because of the diminished negotiating power but also, as I will touch on later, because of the ability for rent to be collected as part of this bill.

I will touch briefly on state waters as well. The Hydrogen and Renewable Energy Bill considers having release areas and then subsequently licences being available for energy companies to have offshore wind farms in state waters. Mostly this falls within three kilometres of the coastline, but also there are waters within Gulf St Vincent the whole way up basically and also Spencer Gulf, which provide a much more sizeable area in terms of state waters.

I am mindful that release areas will not be able to be declared within existing marine parks and sanctuary zones, but you can see some of the effects of consultation going on now around offshore wind. Even in South Australia, consultation processes are going on at the moment in regard to commonwealth waters and over on the east coast as well. These really are critical marine ecosystems. One great example is the cuttlefish in Upper Spencer Gulf near Port Bonython. They are very sensitive. There are a lot of fisheries there as well.

This is handled in the bill but, based on the consultation, if there are any other concerns they will be fleshed out here. It seems from the feedback we have that offshore wind is potentially not going to come online anywhere near as quickly as the onshore wind. If you are going to have regulation of renewable energy, then it also needs to consider state waters in the bill.

Clause 45, subdivision 9, talks about rent. The idea around rent, and how that plays out, is that once a renewable energy proponent has been provided with access to designated lands they will be required to pay rent to the state government for use of that land. I am emphasising again designated land; freehold land is separate, from what I understand.

The rent that is paid replaces the existing laws in the Pastoral Land Management and Conservation Act, where money was to be paid but how that worked is that it went into the Pastoral Land Management Fund and then 95 per cent of that rent was then paid to either the pastoral lessee or the native title holder. The intention was that these amounts would have been negotiated as part of the access agreements with the pastoralist or the Indigenous land use agreement with the native title holder.

Currently, there are no commercial wind or solar farms operating on this pastoral land. That is the intention there. Here we have the framework, where money from those projects went into the Pastoral Land Management Fund and was disbursed and stayed in the region. It does not seem that that is necessarily the case here. It seems that the rent to be collected will be going into general revenue.

Before the election, the government said there were going to be no new taxes; yet, as some stakeholders have said, this is effectively a tax where moneys will be paid directly to the government that was not announced before the election. The feedback I have been getting from stakeholders is that there are concerns around this rent. Potentially, it will come down to what that amount will be. This will be played out in the regulations.

Some of the feedback we have is that if the rent that the government is proposing to charge is too high, and if they are looking to charge rent commensurate with what the freehold landowners charge for their wind and solar farms, that means these renewable energy proponents could say, 'We are paying this much to the government and that means there is less money that potentially can be paid either to the native title holders or to the pastoral lessees, or go into the Pastoral Land Management Fund and effectively stay within that region.'

There are concerns around an economic activity that has been brought about by renewable energy in the regions. We understand that it helps from the state's perspective and an equity perspective, but certainly some of the feedback is about what the ultimate impact on the regions will be, specifically the pastoral districts and the regional communities. There are certainly concerns there that we can flesh out. In terms of the time, I seek leave to continue my remarks.

Leave granted; debate adjourned.

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