The NSW Renewable Energy Planning Framework – significant changes for project proponents

During November, the NSW Government released the final version of its new Renewable Energy Planning Framework (Framework)The Framework introduces a suite of guidelines and tools designed to support renewable energy development and assessment.

The Framework has been created to guide NSW’s transition to renewable energy, support legislated net zero targets, and secure affordable electricity supply for NSW. The Framework applies to applicants for development approval for State significant development project, or any person who carries out the development. Most large-scale projects in NSW will be covered by the Framework, but it will not apply to offshore wind developments.

The following guidelines were issued as part of the final Framework:

1. Wind Energy Guideline – guidance on visual impacts, noise, decommissioning, biodiversity, aviation safety and other issues;
2. Transmission Guideline – guidance on landscape and visual impacts, land use conflicts and other assessment issues;
3. Hydrogen Guideline – guidance on how to categorise hydrogen development in the planning system;
4. Large-scale Solar Energy Guideline – guidance on visual impacts, use of agricultural land, decommissioning, glint and glare and other issues;
5. Private Agreement Guideline – guidance for landowners entering into commercial agreements with developers; and
6. Benefit Sharing Guideline – guidance on benefit sharing and planning agreements for wind, solar and batteries,

The Framework followed from extensive consultation and feedback received on the draft Framework from government, industry, peak bodies and community.

Expectations are also better clarified  by:

• providing more objective development standards;
• introducing clear setbacks to reduce visual impacts from infrastructure; and
• enabling calculation of estimated decommissioning cost.

Key takeaways

The new guidelines are set to have a significant impact from a land perspective. Here are the biggest takeaways for each guideline.

Wind Energy Guideline and Large-Scale Solar Energy Guideline

• The decommissioning cost calculators for wind energy and solar energy help estimate the potential costs of decommissioning to ensure developers and landowners are well informed on cost and investment. Approval of development applications for wind and large-scale solar projects will impose conditions to make sure that infrastructure is decommissioned and the site rehabilitated at the end of a project.¹
• In the Wind Energy Guidelines, the cost of decommissioning is estimated to be around $480,000 per turbine (inclusive of recovery costs). The Guideline acknowledges that this rate can vary and will depend on factors such as whether access roads and cables are removed, the location of waste facilities and the value of scrap metal. If roads and cables are not removed, the salvage value of the metal is expected to cover the cost of decommissioning (based on 2023 rates).² There is also a wind decommissioning cost calculator available here.
• In the Large Scale Solar Energy Guidelines, the cost of decommissioning is estimated to be around $52 per solar panel (inclusive of recovery costs). The Guideline acknowledges that the cost can vary widely. There is also a solar decommissioning cost calculator available here.

Benefit-Sharing Guideline

• Applicants for large-scale renewable energy projects will be required to consider this Guideline and prepare a project’s environmental impact statement according to the guidelines’ requirements. The prescribed benefit-sharing rates to determine the total funding value for community benefits are:
  • $850 per MW per annum for solar energy development
  • $1,050 per MW per annum for wind energy development, or
  • $150 per MW hour per annum for stand-alone battery energy storage systems (located in a rural zone), based on installed capacity and paid over the life of the development, as adjusted for CPI.

Private Agreement Guideline

• There are model clauses for neighbour agreements, options to lease and leases – including for decommissioning, confidentiality, landholder’s rights to participate in planning, compensation, dispute resolution and landholder obligations.
• Applicants must also maintain an agreement register which identifies for each land access agreement:
  • the landholder’s identification, but not personal, details;
  • the type of agreement (landholder or neighbour);
  • any impacts excluded from the agreement; and
  • the duration of the impacts covered by the agreement.
• When an applicant submits its environmental impact statement for a project, the agreement register must be provided to the Department of Planning, Housing and Infrastructure. Applicants must maintain an accurate and up to date agreement register over the life of the project and undertake periodic reviews (such as at the completion of a project milestone).

Transmission Guideline

The following foundational principles are provided to guide the design and development of major transmission projects, including the selection of land for the final project corridor:

• Principle 1 – Efficiency and deliverability – Projects should be economically and technically efficient. The cost of new infrastructure should be considered carefully as costs flow down to the consumer. Consideration of straight-line, cost effective routes need to be balanced against the impracticalities of environmental, social and engineering constraints.
• Principle 2 – Environment and land use – Projects should be located on suitable public land where practicable, with biodiversity and cultural impact as a key consideration. Proponents should consider the inherent characteristics and purposes of different public land categories when weighing up the suitability of public land over private land.
• Principle 3 – People and communities – Projects should avoid and minimise social impacts as much as possible, including visual amenitity. Direct interactions with town centres, residential areas and other sensitive land uses should be avoided.

What next? Impacts and recommendations for project participants

The Framework will change market practice in NSW, and this may ultimately form a benchmark for other states. We recommend assessing your projects against the Guidelines for alignment and best practice, including:

• Reviewing your current documents against model clauses
• Reviewing community benefit programmes
• Reviewing decommissioning programmes and costings
• Updating decommissioning clauses to ensure alignment between obligations in the contract and approval conditions (and no duplication)
• Reviewing projects in the approval stage to ensure approval requirements in the Framework can be satisfied
• Create and maintain a register of agreements that complies with the Private Agreement Guideline.

For more information, please contact Margot King (Partner) and Matt Baumgurtel (Partner, Head of Energy).

¹Department of Planning Housing and Infrastructure, ‘Wind Energy Guideline’, New South Wales Government (November 2024) <https://www.planning.nsw.gov.au/sites/default/files/2023-03/wind-energy-guideline.pdf> 2.5; Department of Planning Housing and Infrastructure, ‘Large-Scale Solar Energy Guideline’, New South Wales Government (August 2022) <https://www.planning.nsw.gov.au/sites/default/files/2024-11/large-scale-solar-energy-guideline.pdf> 2.5.

²Ibid, p 46.