Energy Legislation Amendment Bill 2021

Published on: November 2021

Record: HANSARD-1323879322-120996


Energy Legislation Amendment Bill 2021

Consideration in Detail

Consideration of the Legislative Council's amendments.

Schedule of the amendments referred to in the Legislative Council's message of 21 October 2021

GRN No. 1 [c2021-113C]

No. 1

Page 8, Schedule 1[28], proposed section 192A. Insert after line 29—

192ARegulations relating to community-scale batteries

(1)The regulations may provide for the construction and use of community-scale batteries, including provisions that deal with the following—

(a)authorising and facilitating the ownership and operation of community-scale batteries, or classes of community batteries, by specified persons,

Example

—Regulations could authorise and facilitate the ownership and operation of community-scale batteries by the following—

(a)local councils,

(b)distribution network service providers,

(c)incorporated associations,

(d)co-operatives.

(b)regulating service tariffs for energy flows between connection points where a community-scale battery scheme operates,

(c)exempting community-scale batteries from fees, charges or tariffs under this or any other Act,

(d)ensuring community-scale batteries do not compromise the energy security and reliability of the distribution and transmission systems.

National Electricity (NSW) LawNational Electricity Rules

(2)The regulations may modify the application of, or disapply, a provision of the or the to the extent reasonably necessary to give effect to regulations made under subsection (1).

community-scale battery

(3)In this section, is a battery or series of inter-connected batteries with a storage capacity not exceeding 30 megawatts.

OPP No. 1 [c2021-111G]

No. 2

Page 35, Schedule 3[2]. Insert after line 12—

(1B)An action by the Corporation under subsection (1A) must—

(a)be consistent with the obligations of the Corporation under a sustainable forest management certification scheme, including the following—

(i)restrictions on converting forested land to non-forest uses,

(ii)requirements to support local communities and timber processors with sustainable yield of forest products in the short, medium, and long term, and

(b)not result in premature harvesting of timber or the net loss of timber or land available for forestry operations.

(1C)The Corporation must ensure that any land used for forestry operations in substitution for land used for the construction and operation of renewable energy infrastructure—

(a)is a similar distance from local timber processors as the land for which it is substituted, and

(b)is of the same or greater productive capacity, and

(c)has the same or greater average annual rainfall.

OPP No. 2 [c2021-111G]

No. 3

Page 35, Schedule 3[3]. Insert after line 22—

(1A)The land manager of a forestry area must not issue a permit under subsection (1)(b) unless the land manager is satisfied that issuing the permit—

(a)is consistent with the obligations of the land manager under a sustainable forest management certification scheme, including the following—

(i)restrictions on converting forested land to non-forest uses,

(ii)requirements to support local communities and timber processors with sustainable yield of forest products in the short, medium, and long term, and

(b)will not result in premature harvesting of timber or the net loss of timber or land available for forestry operations.

(1B)The land manager of a forestry area must not issue a permit under subsection (1)(b) unless land used for forestry operations in substitution for the land subject to the permit—

(a)is a similar distance from local timber processors as the land for which it is substituted, and

(b)is of the same or greater productive capacity, and

(c)has the same or greater average annual rainfall.

Mr MATT KEAN:

I move:

That Legislative Council amendment No. 1 be agreed to.

Amendment agreed to.

Mr MATT KEAN (HornsbyTreasurer, and Minister for Energy and Environment) (09:32:14):

— I move:

That Legislative Council amendment No. 2 be agreed to with the following amendments:

Omit proposed subsection (1B)(b). Insert instead—

(b)not result in premature harvesting of timber that causes the Corporation to fail to meet a supply commitment to a local timber processor under a timber supply agreement, and

(c)not result in more than 0.7% of forestry areas currently used for forestry operations with trees of exotic coniferous species being used for the construction and operation of renewable energy infrastructure, and

(d)not result in a net loss of timber available for forestry operations, and

(e)result in a net gain of land available for forestry operations.

Insert after proposed subsection (1C)(a)—

(a1)has an area at least twice as large as the area used for the construction and operation of renewable energy infrastructure, and

The Government will move to amend the two Opposition amendments to the Energy Legislation Amendment Bill 2021. The Opposition amendments introduced in the Legislative Council seek to amend the reforms relating to the removal of barriers to enable renewable energy projects in Forestry Corporation softwood plantations. Specifically, the Legislative Council's amendments include introducing a harvesting range of safeguards on timber supply. The Opposition amendments are supported by the Government, subject to an amendment to refine its restriction. The Government supports the intent of the Legislative Council amendments, which are designed to ensure timber supply is maintained.

However, the challenge with the current drafting, where the development must not result in premature harvesting of timber, is that there are trees of all different ages in areas that are suitable for renewable energy developments. It would be very hard to determine and ensure that all trees that are harvested to accommodate a renewable energy development are mature. The amendment as it currently is would effectively prevent any renewable energy developments from happening. The Government is seeking to clarify this amendment by ensuring that premature harvesting does not cause the Forestry Corporation to fail to meet a supply commitment to a local timber processor under a timber supply agreement. The amendments proposed by the Government in this House will achieve the intent of the original amendments, whilst still supporting the New South Wales Government's goal of delivering cheap, sustainable power and benefiting the economic development of regional communities.

I stress that the change retains the Opposition's Legislative Council amendments to require that there would not be a net loss of timber or land available for forestry operations. The Government is seeking to strengthen the amendment by requiring any land used for renewable energy projects to be replaced with at least twice the area for forestry operations. In essence, the amendments ensure that the softwood plantation estate grows as a result of any renewable energy projects that are developed. In addition, we are also ensuring that no more than 0.7 per cent of Forestry Corporation softwood plantations can be used for renewable energy developments. Encouraging more renewable energy generation within New South Wales would support the Government's commitment to reduce emissions, whilst creating jobs and growing the economy.

Over the past 20 years Canada, Germany, Sweden, Wales, Scotland and Ireland have developed operational wind farms on their forest estates. Within Australia, proposals for forest wind farms within plantations are well progressed in Victoria and Queensland. The New South Wales Government has consulted with industry stakeholders to develop new drafting that would balance the need to safeguard timber supplies and forestry jobs with the need to have a framework that is practical to implement. Overall, these amendments ensure that the legislation will achieve its original policy intent, which is to unlock opportunities for the development of infrastructure for the generation and storage of energy from renewable sources within Forestry Corporation softwood plantations.

Ms TANIA MIHAILUK (Bankstown) (09:36:53):

I move:

That the motion be amended by adding the following words at the end of Legislative Council amendment No. 2:

Insert after proposed subsection (1C)(c)—

(1D)The Corporation will remain a State owned corporation that has the principal function of the sustainable management of the State's forestry areas.

By way of background for the House, schedule 3 of the Energy Legislation Amendment Bill will amend the Forestry Act 2012 to enable the development of infrastructure for the generation and storage of energy from renewable sources that are located near available transmission assets within State forests' softwood plantations. I have received advice from several forestry industry stakeholders that has raised concerns regarding the potential loss of forest plantation areas due to the installation of the anticipated renewable energy infrastructure. I note that was the purpose for which the Labor Party sought amendments in the upper House, which were supported by all parties, including the Government.

The preservation of current timber harvesting volumes is a very important issue, particularly in light of the current timber shortage, which has been exacerbated by the recent boom in home constructions. At the time I did foreshadow that I would move those amendments. Labor moved amendments Nos 2 and 3 in the upper House in order to protect New South Wales softwood timber plantations from the premature harvesting of young trees to accommodate hard renewable energy infrastructure, such as generators and wind turbines. While Labor wholeheartedly supports the production of renewable energy, Labor forced a change to the Government's legislation in order to protect struggling timber workers and jobs from the threat of renewable energy infrastructure being built on current timber plantation areas that provide vital timber supply for timber mills and workers.

Put simply, NSW Labor, supported by the Shooters, Fishers and Farmers Party, The Greens, One Nation and the Independents, forced the Government to change this legislation in order to protect the crucial timber industry jobs and the future of our regional communities. While Labor is fully supportive of renewable energy, the purpose of our amendments in the other place was simply to ensure the continued growth and supply of softwood timber upon which both consumers and workers rely so desperately, particularly in the midst of the current timber shortage. It is important to remember in relation to the amendments to the Forestry Act that none of the stakeholders was consulted prior to this legislation being introduced to the Legislative Assembly. The Treasurer only took it upon himself to become involved in consultation after the amendments were passed in the Legislative Council. It was only then that we were notified by a series of stakeholders that the Government finally had consulted with them. In fact, it led to hundreds and hundreds of workers signing a petition over their concerns with the proposed changes to the Forestry Act.

Another area of concern I raise is that no sites are nominated for the positioning of the energy infrastructure, which means that the changes we are making to the Act will impact softwood plantations across this State. It is important to remember that. I put to the Treasurer, or the energy Minister—whichever hat he has on today—that, as I understand it, the Forestry Corporation of NSW was prepared to make those specific locations public and provide them in the bill but that that was refused by the Minister. That is what we have heard. I seek clarification as to whether that is correct.

I turn to the Government amendments that have been moved today. I note that this is the third set of amendments to the bill. The Government went to the Legislative Council with one set of amendments and then amended those amendments after they were passed in the Legislative Council. Now we have before the House another amendment to that amendment. We are dealing with a host of amendments. This Government cannot make up its mind on how to manage this renewable energy infrastructure in State forests. One of the proposed amendments seeks to insert the provision that an action by the corporation must not result in premature harvesting of timber that would cause the corporation to fail to meet a supply commitment to a local timber processor under a timber supply agreement. While the Opposition supports this amendment, we still have concerns that by removing Labor's unrestricted protection of timber from premature harvesting, the Government is sacrificing the growth and supply of the State's timber resources for the benefit of the Forestry Corporation and the commercial energy industry. The second Government amendment I wish to comment on states that an action by the corporation under proposed section 59 (1) (1A) must:

(c)not result in more than 0.7% of forestry areas currently used for forestry operations with trees of exotic coniferous species being used for the construction and operation of renewable energy infrastructure

While the Opposition also supports this amendment, I make it clear to the House that 0.7 per cent of the relevant forestry areas is 1,600 hectares of land that could be made available to hard energy infrastructure for the benefit of the commercial energy industry. Again, the Government is refusing to advise where those 1,600 hectares are across this State. We do not know why it is refusing to make this public. I also raise concerns over what I believe is a conflict for the Treasurer. Again I ask, what hat is he wearing in this Parliament today? As Treasurer, he is the 50 per cent shareholder of the Forestry Corporation, yet he is also the Minister for Energy and Environment. As shareholder Minister for Forestry Corp, the Treasurer is obligated to make decisions in the best interest of the corporation. That explains why he is opening up the New South Wales timber plantations to the commercial energy industry. But that is in direct conflict with his obligation as the energy and environment Minister to protect the State‑owned timber estate. All of this begs the question, why is the Forestry Corporation so eager to assist the Government with its provision of renewable energy infrastructure? Why is the Government so eager to assist the Forestry Corporation in entering into the energy provision business? The Forestry Corporation's own website states that its purpose is to:

… manage more than two million hectares of State forests, including NSW's largest renewable timber production and plantation estate …

Members must ask why the Government is moving these amendments today. We know that the Government had the Forestry Corporation on the auction block in December 2019. The bushfires then tore through the forestry estate and almost 30 per cent was damaged. Of course, in February 2020 the Government then announced that it was no longer looking for buyers, given the fires had burnt so many trees that private profiteers were no longer interested. This Government is preparing for another fire sale of a public asset in Forestry Corporation. Labor supports action on climate change. Labor supports renewable energy and sustainable plantation timber supply and is seeking to protect Forestry Corporation from any future privatisation. That is why I have moved my amendment to the Minister's amendment. I expect the Government to support my amendment.

Ms FELICITY WILSON (North Shore) (09:45:40):

I support the Minister's amendments to the Energy Legislation Amendment Bill 2021. As members have already heard, amendments were introduced during debate on this bill in the other place. Some of the discussion involved whether or not the reforms would enable appropriately removing the barriers that will enable renewable energy projects in Forestry Corporation's softwood plantations. I have spoken on this issue in this place before. Increasing our renewable energy opportunities, including on Forestry Corporation land, is obviously a goal that the Government supports. The amendments that were moved in the Legislative Council looked at introducing a range of safeguards around harvesting timber supply. The Government supports the premise of the Opposition's amendments in the Legislative Council; however, it has had to refine this restriction.

I note that the Minister has already spoken to this matter. While the intent of what the Opposition put forward in the Legislative Council is supported in essence by the Government, we want to make sure that we design this legislation to ensure that timber supply is maintained. With the current drafting, there is a definitional issue around the maturity of these plantations. We ask for clarification from the Opposition as to how it would determine the maturity levels that exist within these trees throughout the plantations, and how would it accommodate renewable energy development with that understanding of the maturity levels of the different trees? The amendment as currently proposed by the Legislative Council could, in effect, prevent any renewable energy developments from happening.

The member for Bankstown said that the Opposition supports addressing climate change and renewable energy, and I recognise that. It is a goal we are uniform on in this place. I acknowledge the member's contributions on that issue. Of course, the Government wants to work towards that goal as well. However, we believe that the amendment as currently proposed by the Legislative Council would risk preventing those renewable energy developments from occurring. The Minister has sought that clarification and is working through understanding whether or not this amendment would impact the Forestry Corporation's ability to meet its supply commitments for local timber processing. Obviously the Government continues to have the goal of delivering sustainable, cheap renewable power while benefitting the economic development of our regional communities.

What the Government has proposed will ensure that any land that would be used for renewable energy projects on Forestry Corporation land would in fact be replaced with at least twice the area for forestry operations. In essence, these amendments would ensure that the softwood plantation estate would actually grow over time by introducing renewable energy projects. Not only do we have the win of seeing new renewable energy projects installed in these locations, but we would actually see an increase in the softwood plantation estate during that time. The Government also has limitations on the proportion of the Forestry Corporation softwood plantation land that can actually be utilised for those new renewable energy developments, in order to ensure that we proceed with caution. That limit is no more than 0.7 per cent of the estate to ensure that the Forestry Corporation can meet its renewable energy goals as well as its forestry goals. We know that the initiatives in place will work to support the creation of jobs and also grow the economy while supporting our goals around renewable energy. That is happening across the globe, as the Minister and the member opposite have said. We know those estates have been introduced in many countries, particularly in relation to the introduction of windfarms on forestry lands.

The amendment will ensure that we can achieve our original policy goals in the legislation. Some of the original policy goals include ensuring that New South Wales has some of the cheapest, most reliable and cleanest energy in the world. That is the vision that all members in this place supported in the Electricity Infrastructure Roadmap that the Minister introduced earlier this year. The amendment will ensure that the Government meets its commitment to provide reliable and accessible energy at the lowest cost possible for our regional communities. The amendment will unlock the asset base within forestry to make sure that different opportunities for renewables can be developed. I support the Minister's amendment. We know that we can compete with the rest of the globe, whether it is Canada, Sweden, Germany or the United Kingdom, and achieve those outcomes for New South Wales.

Ms TANIA MIHAILUK (Bankstown) (09:50:45):

I speak in debate on the Energy Legislation Amendment Bill 2021 and thank the member for North Shore for her contribution. I know she is very passionate about climate change and led the debate on the bill on behalf of the Government. It is important that I make it very clear that Labor is supporting the Government amendments proposed today. We support the amendments that the Government is making to the Legislative Council amendments. We make it clear that we want to add a clarification by inserting a subsection that the corporation will remain a State-owned corporation that has the principal function of the sustainable management of the State's forestry areas. The Treasurer and the member for North Shore made it clear in their contributions that only 0.7 per cent of the State's forests would be used for renewable energy infrastructure. By that definition, the vast majority of the Forestry Corporation's core function will be sustainable management of the State's forestry areas. If only 0.7 per cent of State forests is allocated for the use of renewable energy infrastructure then 91.3 per cent should remain and the Forestry Corporation can continue carrying out its core purpose of ensuring that the State's forestry areas are sustainably managed.

I can see no reason for the Government to not support my amendment to its amendment. We have worked in a conciliatory way from the start in the Legislative Council. I worked with the member's staff outside the Legislative Council Chamber to adopt a unanimous amendment. I remind members that the amendments moved in the upper House were agreed to by every party in the Legislative Council, including the Government. In that same spirit I ask the Government to agree to this amendment, which is a completely acceptable amendment. If it does not intend to fatten the pig for sale or to privatise the Forestry Corporation then there is no reason it would not agree to the Opposition amendment moved today.

Mr JAMES GRIFFIN (Manly) (09:53:31):

I make a contribution to debate on the Energy Legislation Amendment Bill 2021. The bill streamlines and cleans up some important legislation. It is worth acknowledging the importance of the bill, which looks at issues relating to energy emergencies, particularly cybersecurity matters, around the modernisation of our electricity grid and the importance and nexus between that activity and the work that may occur in various softwood plantations to install renewable energy facilities. The bill will modernise and harmonise the procedures relating to energy supply issues and emergencies. It is time for those emergency provisions to be updated because they have been operating unchanged since they commenced in 1987. The technology that is involved in renewable energies and the safety and security of our energy network has dramatically evolved since then. The way in which the networks are now plugged into the grid allows them to potentially be victims of cyber attacks.

Given the recent demands on resources to respond to energy emergencies, it is critical that the emergency provisions relating to energy and energy resources are still fit for purpose and relevant. Those demands can be seen in the Black Summer bushfires of 2020 when multiple emergency agencies, including energy, had to work together to manage its impacts. Those changes will support the Government to implement the appropriate response plan when an energy-related emergency arises. The bill will also establish a consistent approach to how the New South Wales Government manages energy emergencies across the State's energy utilities sector. Australia and the world have seen an increase in cybersecurity threats, and critical energy infrastructure assets are not immune to cyber threats and attacks. Those threats are becoming more prevalent as the energy sector becomes increasingly digitised.

Annual Cyber Threat Report

In its 2020-21 the Australian Cyber Security Centre noted that top-tier cybercriminals have a preference to hunt big game entities. Those entities are often high-profile, high-value targets that provide essential services or critical infrastructure such as our energy network and potentially those that could be placed in softwood plantations. The New South Wales Government must act so that our critical infrastructure is protected from cyber attacks. We need to put the appropriate arrangements in place to protect and ensure the continuity of our essential services. Our response to emergencies must continually adapt as threats evolve, and they evolve very quickly. The bill will allow quick action to be taken by ensuring that we have a single framework to respond to energy-related emergencies, whether it be electricity, gas or other fuels. As we saw in the devastating bushfires of 2020, an emergency can impact multiple energy sectors. One of the lessons learned from those catastrophic and unprecedented fire conditions is that the emergency framework in our energy sector needs to be more agile and efficient.

In 2015 and 2016 cyber attacks on Ukrainian power stations affected more than 200,000 customers. In May this year the United States' largest fuel pipeline operator was shut down for nearly a week, which created supply shocks in the US energy market and flow-on effects. Those types of attacks are becoming more common. We must do everything we can to prevent those kinds of attacks from curtailing our energy supplies. Whether it be for electricity, gas or pipelines, we need to ensure that the Minister has the appropriate powers to respond to cyber-related emergencies, which could avoid such crippling events like the ones we have seen in the US.

Extension of time

In 2017 Australia's former Chief Scientist, Alan Finkel, in his Independent Review into the Future Security of the National Electricity Market, recommended stronger security measures be put in place. While the national framework is currently being developed, the timing and outcome of those measures are uncertain. As I mentioned earlier, the sophistication and number of attempted cyber attacks on our critical energy infrastructure is growing rapidly and, frankly, we do not have time to wait. []

The sophistication and number of attempted cyber attacks on our critical energy infrastructure is growing rapidly and we do not have time to wait. It is appropriate and important for the bill to introduce backstop measures so that energy generators, networks and pipelines are required to implement appropriate cybersecurity arrangements to ensure continuity of our essential services. Those backstop measures can also be designed to support the cybersecurity framework that is currently being developed nationally.

The bill in its totality is incredibly important. As the Parliamentary Secretary acknowledged—she is now in the Chamber—in her second reading speech on behalf of the Minister, the bill sets in place a framework for the State to continue its terrific work of setting up to become a renewable energy superpower of the future. The volume of work that has taken place over a number of years with the various regulators to identify and activate renewable energy zones demonstrates the profoundly positive economic impact that renewable energy can have across New South Wales. Indeed, it has solved a number of the issues and discussions that have taken place around just transitions, and that is very important to the bill. I commend the bill to the House.

Dr JOE McGIRR (Wagga Wagga) (10:00:45):

I contribute to debate on the amendments to the Energy Legislation Amendment Bill 2021. I am very pleased with the work that the Opposition has done in the other place to ensure the supply of forestry materials going forward. Certainly in my electorate the forest industry faces significant challenges in the years ahead, and the bushfires are a major cause of that. The country will suffer a severe shortfall of timber in years to come, so the preservation and extension of our forests is very important to prevent that. I am also interested in renewable energy. I have spoken before about the importance of renewable energy, which of course needs infrastructure. My electorate is currently dealing with infrastructure for Transgrid and transmission lines.

I am very keen for the Government to use public land wherever possible for transmission infrastructure. The original bill allowed for that by opening up the issues around renewable energy. The important amendments that have been accepted—and I thank the Minister and the Government for accepting the amendments that have been proposed—will preserve and I hope enhance the forestry mass. But the amendment from the member for Bankstown emphasises the importance of Forestry Corporation remaining in State hands and remaining as public land because, where public land is available and where possible, that land should be used for transmission infrastructure in this State. Soon there will be a nest of electricity wires across the State; the west of the State will be covered in them. It will have to go somewhere and we need it to go through public land. I welcome and support the additional amendment from the member Bankstown. In the end there is a balance; the bill has the balance right. It protects the forestry industry, it keeps public land and it allows for transmission infrastructure to continue.

The SPEAKER:

With the concurrence of the House I propose to finish this item of business.

Ms TANIA MIHAILUK (Bankstown) (10:03:20):

I move:

That the amendment be amended by adding the following words at the end of Legislative Council amendment No. 2:

Insert after proposed subsection (1C)(c)—

(1D)The Corporation will remain a State-owned corporation that must act in accordance with the objectives of the Act.

The amendment addresses the concerns of stakeholders and will certainly provide some comfort to the many timber workers across our State and the many regional communities who rely on the industry to flourish.

Mr MATT KEAN (HornsbyTreasurer, and Minister for Energy and Environment) (10:04:51):

— The Government supports the amendment.

The SPEAKER:

The question is that the amendment of the member for Bankstown to the amendment of the member for Hornsby be agreed to.

Amendment of the member for Bankstown to the amendment of the member for Hornsby agreed to.

The SPEAKER:

The question is that the amendment of the member for Hornsby as amended be agreed to.

Amendment of the member for Hornsby as amended agreed to.

The SPEAKER:

The question is that Legislative Council amendment No. 2 as amended be agreed to.

Amendment as amended agreed to.

Mr MATT KEAN (HornsbyTreasurer, and Minister for Energy and Environment) (10:06:37):

— I move:

That Legislative Council amendment No. 3 be agreed to with the following amendment:

Omit proposed subsection (1A)(b). Insert instead—

(b)will not result in premature harvesting of timber that causes the corporation to fail to meet a supply commitment to a local timber processor under a timber supply agreement, and

(c)will not result in more than 0.7% of forestry areas currently used for forestry operations with trees of exotic conifer species being used for the construction and operation of renewable energy infrastructure, and

(d)will not result in a net loss of timber available for forestry operations, and

(e)will result in a net gain of land available for forestry operations, and

Insert after proposed subsection (1B)(a)—

(a1)has an area at least twice as large as the area used for the construction and operation of renewable energy infrastructure, and

Amendment as amended agreed to.

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