Long-awaited NSW Renewable Energy Planning Framework delivers greater certainty for renewable energy projects

The Transmission Guideline is largely similar to the version in the Draft Framework, although it now defines 'new major transmission projects' to which the Framework applies as meaning 'energy transmission projects that are declared as SSI or CSSI'. It was previously unclear what was meant by major transmission projects.

Like the Draft Framework, the new Framework includes a Technical Supplement for Landscape and Visual Impact Assessment for transmission projects, which requires a setback from dwellings that varies depending on tower height (eg 370m for an 80m tower). However, consistent with the other supplements, the requirement to consider dwelling entitlements has been removed and impacts on proposed dwellings with development consents that have not been physically commenced are no longer required to be assessed in a visual impact assessment. Unlike the other supplements, there is no requirement to consider impacts of major transmission projects on properties with 'development rights'.

When the Draft Framework was released last year, an updated version of the Large-scale Solar Energy Guideline had not yet been prepared, though proposed updates were foreshadowed in the overview to the Draft Framework. Most of those changes have now been incorporated into the Guideline, with some exceptions.

The most notable development is that the Guideline now includes a commitment by government to make every effort to assess large-scale solar energy applications within 100 government days. While there may be some uncertainty as to what constitutes a 'government day' (this term is not defined), this will be very welcome news for applicants.

Also of note, the new Guideline:

• does not include a map identifying desirable, suitable and less suitable sites for solar developments, despite this being foreshadowed in the Draft Framework (likely due to the controversy caused by the map that was included in the initial draft Wind Energy Guideline).
• confirms that the Minister will consider requests to declare a large-scale solar energy development as CSSI if it includes a significant energy storage system (eg a battery with a power capacity of 750 MW).
• like the new Wind Energy Guideline, helpfully identifies that local infrastructure contributions will generally have little or no application to large-scale solar energy projects.
• identifies that the cost of decommissioning solar panels is estimated to be around $52 per panel (inclusive of recovery costs), which may provide useful guidance when negotiating landowner agreements that include security for decommissioning costs.
• incorporates the new Benefit Sharing Guideline and Private Agreement Guideline (discussed below) and omits the equivalent provisions that had been in the old Solar Guideline.
• introduces the same assessment requirements for 'development rights' discussed above, but only in respect of vacant land that immediately adjoins the development or that will experience exceedances of noise criteria.

The finalised Benefit Sharing Guideline is largely consistent with the version in the Draft Framework. It expresses an expectation that applicants will provide benefit-sharing programs at a rate of $850 per megawatt per annum for solar energy developments, and $1050 per megawatt per annum for wind energy developments, based on installed capacity and paid over the life of the development (indexed to CPI).

Notably, a new benefit-sharing rate of $150 per megawatt hour (which was not in the Draft Framework) has also been introduced for standalone BESS developments located in rural zones. This rate will not apply to BESS projects that are delivered as part of a wind or solar energy development.

Other points to note include:

• The Guideline indicates that benefit-sharing programs must include benefits at both the neighbourhood and local community level, with benefits for neighbours to be separate to any mitigation measures or payments being provided to neighbours under private agreements.
• The benefit-sharing will not necessarily have to be entirely in the form of a monetary contribution. Applicants may be able to structure the contribution in different ways (such as providing direct capital works), provided the overall value is equal to the nominated monetary amount.
• Applicants will need to outline the proposed community benefit-sharing arrangements for the project in their EIS, including the expected total value of benefits they will pay. The Guideline suggests that as a general guide, no less than 85% of the total benefit-sharing value should be administered by the relevant council(s).
• The Guideline also states that the total value of benefit-sharing should not exceed the rates identified above. Accordingly, while the new rates will no doubt in practice form a baseline that councils will expect to receive as a matter of course, the rates will also act as a ceiling and should assist applicants to resist requests for higher amounts.

One of the most significant aspects of the Draft Framework was the introduction of a 59-page Private Agreement Guideline that was to replace the existing one page of 'minimum standards' for neighbour agreements in the 2016 Wind Energy Guideline. The draft included a template 'impact agreement' that could be used for both host and non-host landowners. Industry provided extensive feedback about this template, with concerns raised about the suitability and appropriateness of having a template, as well as the content of many of the clauses.

The final Private Agreement Guideline does not include a template agreement—this has been replaced with general guidance on matters that should be addressed in agreements and a select number of 'model clauses'. This guidance applies to both host landowner documents as well as non-host agreements (now described as 'neighbour agreements', rather than 'impact agreements' as per the Draft Framework).

The majority of the previous 'minimum standards' for neighbour agreements have been brought across to the Private Agreement Guideline with some new additions, although these are no longer described as 'minimum standards'. Rather, the document is framed as general guidance that applicants should consider when negotiating any host and neighbour agreements. That being said, landowners will likely expect any new agreements for projects covered by the Framework to address the matters in the Private Agreement Guideline and it may in practice be difficult to depart from the model clauses, even though these are not expressed as being mandatory.

A key difference between the final Guideline and the version in the Draft Framework concerns the degree to which impacts must be scoped in an agreement. The Draft Framework required that impacts be 'fully particularised' in an agreement, including likely noise levels at different times of the day and photomontages to reflect visual impacts. The final Guideline no longer includes these requirements, perhaps in recognition of the tension referred to above that arises from the evident desire for landowners to be both signed up early in the process, at a stage when only preliminary assessments are typically available, and also to be well-informed of the impacts they will experience.

The key differences between the current 'minimum standards' for landowner agreements and the requirements in the new Guideline include:

• Agreements should make provision for circumstances where the project is materially delayed, or the scope or scale of the project materially changes—the Guideline states that agreements should include a clause that triggers a review of compensation in the event of material changes.
• Agreements should specify that the applicant is responsible for monitoring project impacts and specify how the impacts will be monitored, how often and how the landholder will be provided the results. The agreement should also contain provisions regarding land access for monitoring.
• Host landowner agreements should outline biosecurity protocols and measures the applicant will take on the property to manage biosecurity risks.
• A register of agreements is to be provided to the Department when the EIS is submitted that outlines each agreement, what impacts are excluded and the duration of those impacts. The draft Guideline suggested copies of all agreements would need to be submitted to the Department, however this has now been replaced with the register concept. This is a welcome development that will avoid applicants having to disclose commercially sensitive terms of agreements, such as the extent of compensation payable.
• Key information about the project is to be given to the landowner after signing, including an indication of the extent of the development on the site, details of likely impacts, likely start date and duration of works. Information should be provided to landholders at key milestones during the project.

The new model clauses in the Guideline cover the following matters:

• Confidentiality: while the Draft Guideline had suggested that landowners should not accept confidentiality clauses, the final Guideline acknowledges that confidentiality clauses can benefit both parties. The model clause suggests that only certain information should be confidential, rather than the entire agreement.
• Landholder's right to participate in the planning process: the Guideline suggests agreements should include a clause that acknowledges the landholder's continued right to participate in engagement about, and make submissions in relation to, the development (provided the submission does not constitute an objection), and correspond with authorities if the applicant does not comply with consent conditions.
• Compensation: this model clause is a very basic compensation clause which, in our view, will need to be adapted in each agreement.
• Dispute resolution: the model dispute resolution clause provides for mediation processes prior to court proceedings, which is standard in these agreements.
• Other landholder obligations: this clause provides that the landholder may allow access for the purpose of mineral exploration, surveys and field work for major transmission projects, and operation of other electricity generating equipment for private domestic use. The Guideline expressly states that a private agreement cannot restrict access or use of land for minerals exploration.
• Decommissioning: the Guideline suggests landowners may wish to ask for security for decommissioning costs in the form of a bank guarantee. The Guideline also suggests the cost of decommissioning a wind energy project is around $480,000 per turbine.

We anticipate that the model clauses in the Guideline will form a starting point for negotiations with landowners going forward and applicants may need a strong justification to depart from the Guideline.