Energy, resources and environment update - October 2022

The Environment and Other Legislation Amendment (Removing Nuclear Energy Prohibitions) Bill 2022 (Cth) was introduced into the federal Senate on 28 September 2022.

The Bill purports to remove the existing Nuclear Energy Prohibitions that are currently in place under federal legislation and incentivise the industry to take the lead in developing nuclear energy designs and technology in Australia.

SACOME CEO, Rebecca Knol, stated that, “the introduction of the Bill was a positive step to progressing an informed and balanced conversation on nuclear energy” and “all low-emission technologies, including nuclear, should be considered as part of the future energy mix”. Modern nuclear energy offers a zero-emissions energy source with the ability to provide safe, affordable, and reliable and dispatchable baseload power in extremely large quantities.

A recent SACOME-commissioned poll, conducted in July 2022, identified that 75% of South Australians surveyed support an informed and balanced conversation around developing a nuclear energy industry in South Australia, and more than six in ten adults (63%) agree that, given recent cost and reliability issues of the Australian electricity market, all energy sources, including nuclear, should be on the table for consideration.

The Australian Energy Market Operator (AEMO) has completed pilot testing for its world-first grid ‘connections simulator’ ahead of an expected launch later this year. The simulator provides a cloud-based environment for users to run studies against AEMO’s model for new generation and storage projects connecting to Australia’s National Electricity Market (NEM).

Securing a new grid connection for renewables has become a barrier to the transition of Australia’s energy system away from traditional energy sources. AEMO stated that in the next decade, Australia will experience our first cluster of coal-generation retirements, equal to approximately 14 per cent of the NEM’s total capacity, which will challenge electricity reliability and power system security.

AEMO’s grid connections simulator is designed to help reduce risks, costs and time to approve the connection of new generation and storage projects, which are critical to replace this retiring coal generation.

On 6 October 2022, the Australian Renewable Energy Agency (ARENA) announced $1.5 million in funding to Spinifex Offshore Wind Farm Pty Ltd for a 1,000 MW offshore wind farm project off the coast of Portland, Victoria.

The offshore wind farm is proposed to be connected to the National Electricity Market (NEM) via the existing substation at the Portland Aluminium Smelter and supply renewable electricity to the smelter which will decarbonise its operations.

The smelter has capacity to produce approximately 358,000 tonnes of aluminium per annum and represents approximately 10 per cent of Victoria’s total electrical demand. The wind farm aims to demonstrate the direct integration of variable renewable energy generation with a large, continuous, industrial load.

The development of offshore wind farms internationally has accelerated over the past decade. Offshore wind farms benefit from higher capacity factors, increased turbine size and efficiency, as well as an increased site availability by avoiding onshore land constraints.

The Offshore Electricity Infrastructure Act 2021 (Cth) commenced on 2 June 2022 providing an effective regulatory framework for offshore renewable energy infrastructure and offshore electricity transmission infrastructure, and related purposes. There are currently over 20 offshore wind projects in early stages of development in Australia.

The SA Government’s $593 million Hydrogen Jobs Plan has received 60 proposals from organisations from around the world with submissions regarding the design, implementation and construction of this pioneering project.

The recently established Office of Hydrogen Power will use the submissions to inform the procurement and final selection of the hydrogen facility project.

The Hydrogen Jobs Plan targets construction of:

• 250 Mwe of electrolysers;
• 200 MW of power generation (powered by the electrolysers);
• hydrogen storage for 3,600 tonnes of hydrogen, or the equivalent of two months of hydrogen consumption for
• power generation.

The $593 million hydrogen facility is expected to be operational by the end of 2025.

The South Australian Department of Treasury and Finance released a summary of SA Overseas Goods Exports for the 12 months to August 2022, with overseas goods exports totalling $15.1 billion, a 15% increase on the previous twelve months.

The key major export commodities recording growth in the year to August 2022 included:

• wheat (up $595 million or 43%);
• oil seeds and oleaginous fruits (up $459 million or 193%);
• vegetables (up $342 million or 65%);
• meat of sheep and goat (up $105 million or 19%); and
• iron and steel (up $73 million or 69%).

The largest South Australian overseas good exports markets recording growth in the year to August 2022 included:

• United States (up $309 million or 30%);
• Philippines (up $302 million or 50%);
• Taiwan (up $269 million or 118%);
• France (up $236 million or 320%); and
• India (up $215 million or 27%)

The Commonwealth Parliament passed the Climate Change Bill 2022 (Cth) on 8 September 2022 after the Bill was introduced into the House of Representative on 28 July 2022 during the first parliamentary week of the Albanese Government.

The Bill legislates Australia’s commitment to a greenhouse gas emissions reduction target of a 43% reduction from 2005 levels by 2030, and net zero by 2050, following the growing coalition of countries pledging to meet the net-zero target.

The Bill requires the Minister for Climate Change to deliver an annual statement to Parliament describing Australia’s progress towards achieving its emission reduction targets, relevant international developments, climate change policy and the effectiveness of Commonwealth climate change policies in contributing to achieving the targets.

The operation of the Bill gives advisory powers to the Climate Change Authority to give the Minister advice in relation to the required annual climate change statement and future greenhouse gas emissions reduction targets and provides for periodic reviews of the operation of the legislation.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.


Co-authors

Name: Mario Pegoli,

Position: Associate and corporate adviser

Practice: Corporate

Name: Stephanie Maurangi

Position: Lawyer

Practice: Transactions

Name: Yasmin McBride-Hellewell

Position: Law clerk

Practice: Transactions

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