Can planning policy keep pace with Australia's renewable energy revolution?

Utility-scale renewables have moved at a remarkable rate in recent years

According to the Department of Climate Change, Energy, Environment and Water, 'renewables contributed 35% of total electricity generation in 2023, specifically solar (16%), wind (12%) and hydro (6%). The renewables share of total generation was up 3% on 2022, the highest share of total generation on record.'

Our energy transition has come in asset waves. There was a huge surge in wind farm development early on, then a photovoltaic solar boom, and the market is now turning its attention to battery storage, pumped hydro and offshore wind. These development surges have been largely market-led. The statutory approval mechanisms and policy levers used to assess and progress initiatives have struggled to keep pace. Planning guidelines have often been implemented after the peak of market interest, and some have inadvertently introduced new barriers to approval, and investment uncertainty by extension.

If we are serious about diversifying Australia’s energy market and integrating renewables at the utility and domestic scale, we need energy policy and statutory processes to anticipate and lead the market, not follow in its footsteps.

Avoiding the approvals cliff for energy transition projects

From a Queensland perspective, the Department of Resources interactive electricity map currently shows 308 renewable energy projects (solar and wind farms, pumped hydro, bioenergy and battery storage). Of this number, 103 facilities exist, 29 are under construction, and 176 are proposed.

The gap between projects underway and proposed is wide, a clear indicator that the investment landscape is uncertain.

A percentage of the 176 proposed projects will not progress due to limitations in grid capacity, or viability outcomes deemed too close to the line for investors. In reality, the schism is even greater. Many ‘silent’ projects aren’t represented in the numbers as they didn’t progress to investment decision and so haven’t made the official count. In markets that are new/maturing, investment uncertainty is the enemy. Where the path to approval or gaining a grid connection agreement is complicated or unclear, the proposition is far less attractive for investors. You begin to see a widening gap between proposed projects and shovels in the ground.

Energy policy with intent

Energy strategies and policies are all about creating the conditions for a positive future. It’s about putting mechanisms in place to prevent ‘bad development’, sure. But it should also be about creating a framework where ‘good development’ is attractive and easy. Our planning policies must keep the future they are striving for in view. They must encourage the market to get involved in achieving the intent behind them. The states and territories are taking the lead on putting these policies in place. The next step is to ensure they are working together at the market level, and that policy and statutory planning are enabling each other’s success.

Energy planning: filling gaps, removing barriers

So how do we ensure policy and planning drive Australia’s renewable revolution rather than put the brakes on it? Well…it’s complicated. But there are a few things we could consider.

There’s no getting around the fact that statutory planning is a slow-moving beast. Making changes to legislation requires consultation with a lot of stakeholders. It takes time, and it needs to be rigorous. As new renewable technologies emerge, there are always going to be gaps in the legislation or barriers to approval that don’t match the intent of the policy/scheme. We need to be constantly looking at how these gaps and barriers are addressed by early adopters and looking to proactively and quickly mitigate, fill or remove them.

For example, there has been a lot of conversation in the market in the last couple of years about how Australia could integrate hydrogen as an alternative fuel source for manufacturing, vehicles, or other uses.

If hydrogen is where we want to go, what unintended statutory planning barriers could we be addressing now to make that viable?

How are we going to provide the right conditions for the rolling out of infrastructure to support the expansion of this alternative fuel? What can we learn from places like the UK and other parts of the world that are almost a decade ahead of us on hydrogen?

The renewable energy industry is moving fast, and it is only through the integration of diverse forms of generation that we can make the system work. Forcing new asset classes through complex approval pathways that weren’t designed for them is losing sight of positive planning intent. Policies are progressing, but more detail and direction is required to foster investment confidence. If we are to achieve our goal to reduce emissions and integrate greener energy, we need our policy setting and statutory planning to be a path of least resistance for good (and green) development.