It goes without saying that
obtaining approvals for major renewable energy projects in a timely fashion is
critical to the commercial success of a project and indeed the reduction of
emissions more broadly. So why are so many developers getting it wrong? To
minimise risk on projects timing is a critical factor that needs to be better
coordinated both by:
1. Governments, through more streamlined, better
co-ordinated statutory planning and environmental approval processes.
2. Project applicants by taking responsibility in the preparation of the application and the dissemination of information through a coordinated stakeholder engagement strategy.
This article discusses these
matters in the context of the current economic climate and the advantages to ALL
if these projects can be delivered in a more timely manner.
The global context
Since the Earth Summit in Rio
in 1992, a large number of countries signed the United Nations Framework
Convention on Climate Change (FCCC). This global treaty, like the Kyoto
protocol and the less significant Copenhagen Accord, has the ultimate objective
to stabilise greenhouse gas concentrations in the atmosphere at a level that
will prevent dangerous human interference with the climate system.
The achievement of this ultimate objective is vital.
According to many scientists,
if humanity wishes to preserve a planet similar to that on which civilization
has developed and to which life on Earth is adapted, paleoclimate evidence and
ongoing climate change suggests that CO2 will need to be reduced from its
current 385 parts per million to at most 350 parts per million. If the present
overshoot of this target CO2 is not brief, there is a possibility of seeding
irreversible catastrophic effects. We need to do everything within our
power to met the 350 parts per million target. This includes the development of
cleaner energies such as wind, solar and biomass to name a few.
Australia’s response to the
global context
Collectively, the Australian
government responded to the Rio Summit with the Inter-governmental Agreement on
the Environment (IGAE)
This agreement recognised the need for “…integration of environmental and
economic considerations in decision making for balancing the interests of
current and future generations.”
Also in 1992, all Ministers of the Australian Cabinet endorsed the National
Strategy for Ecologically Sustainable Development (NSESD), which stated as a primary
goal to endorse “…development that improves the total quality of life, both now
and in the future, in a way that maintains the ecological processes on which
life depends”. NSESD also provided a framework for the
implementation of Agenda 21 in accordance with the obligations entered into at
Rio.
The summary report on NSESD
in 1993-1995 confirmed that the attainment of sustainable development involves
partnerships between government, industry and community groups particularly in
agriculture and some areas of mining and manufacture.
Given the role of renewable energy
projects in cutting emissions, there approval and development in Australia is
critical to Australia’s national response to the Rio Summit and indeed achieving
a reduction in CO2 emissions to 350 parts per million.
On 17 July 2006, Victoria
become the first Australian state to announce its own mandatory renewable
energy target and supporting scheme, reducing the need to use fossil fuels to
produce electricity in the future. [7]
The intention of the scheme was to reduce reliance on coal fired power stations
with the view of investing more heavily in renewable energies.
More recently, on 13
September 2012, the Australian Government developed a comprehensive plan to
move to a clean energy future. Central to that plan was the introduction of a
carbon price, which intends to cut pollution in the cheapest and most effective
way and drive investment in clean energy sources such as solar, gas and wind.
The Australian continent is
uniquely positioned in the global market and has the opportunity to entice
investors to harness renewable energies in the natural environment in a manner
that will deliver on the Australian Government’s commitment to ensure that the
equivalent of at least 20 per cent of Australia’s electricity comes from
renewable sources by 2020 as well as speed up the adoption of renewable energy
technologies and help smooth the transition to a clean energy future.
The Federal Government
announced a number of initiatives to facilitate a critical mass of renewable
energy, energy efficiency and low-pollution energy projects across Australia.
This has included a new $10 billion Clean Energy Finance Corporation (CEFC) to invest
in the commercialisation and deployment of renewable energy, energy efficiency
and low pollution energy technologies; the introduction of the independent Australian Renewable Energy Agency (ARENA) to streamline and
coordinate the administration of $3.2 billion in existing support for research
and development, demonstration and commercialisation of renewable energy
technologies; and an additional $200 million over five years to support
innovation through grants for business investment in renewable energy, low
emissions technology and energy efficiency under the Clean Technology Innovation Program.
The cost of development
approvals
Despite the Government’s
clean energy initiatives, the development approvals process continues to prove
quite cumbersome and time costly for most project applicants of renewable
energy projects. Why is this? Is it because Federal and State Governments are
working independently of one another? Is it because project applicants are not
proactively strategising for possible conflicts?
Australia’s current market conditions,
are costing developers significant amounts of money in holding costs and in
some cases stopping the sustainable development of renewable energy projects.
These local market conditions are forcing financiers and global investors to
take their business to other markets such as China, the United States, Germany,
Italy and India as outlined in the Ren 21 Global Status Report on Renewable for
2012.
Global new investment in
renewables rose 17% to a record USD 257 billion in 2011. This increase has
taken place at a time when the cost of renewable power equipment fell rapidly
and there was substantive uncertainty over economic growth and policy
priorities in developed countries. One of the highlights of 2011 was the strong
performance of solar power, which surpassed wind power, the biggest singe
sector investment in recent years.
If Australia wants to share in this pie it needs to position itself in the
global market in a manner that attracts investors. There’s no denying that
Australia’s natural environment makes it attractive to renewable energy
investors. We just have to streamline some of our processes so that certainty
around development approval processes are quick and easy.
Recognising the importance
of coordination amongst the tiers of Government
Despite the Government’s
policy and legislative reforms, there has been considerable criticism of
Australia’s commitment to sustainable development given the lack of
coordination across the tiers of government in the statutory development
approval processes required for each major renewable energy projects. Have
Australian policy makers over the years been more concerned with broader
visionary statements and the carbon tax rather than the method of approvals
required before renewable energy projects can be delivered? Are our current
statutory processes bogging us down in assessment of projects rather than their
delivery to the market?
At the 33rd meeting
of the Council of Australian Governments (COAG)
in Canberra on 25 July 2012, the
Prime Minister, Premiers, Chief Ministers and the President of the Australian
Local Government Association (ALGA) discussed a number of matters including future
competition and regulatory reform and construction industry costs and
productivity.
At the request and lobby of
the Victorian Regional Cities Business and Industry Forum, who met in April
2012, current challenges and opportunities for growth in Victoria’s regional cities,
and the importance of building partnerships to support economic growth were
thrown into the lime light. Amongst various matters noted at the forum, it was
agreed by all that “…statutory planning and environmental approval processes
can, at times, delay or obstruct major projects.” It was agreed that “…Government
action to reduce red tape and facilitate productivity could assist this issue.”
Recognising that prosperity
is a shared responsibility, delegates emphasised the importance of regional
cooperation between the various tiers of government and business and regional
leaders, COAG agreed to
establish an independent review panel to conduct a broad ranging investigation
into cost, competitiveness and productivity challenges in the commercial, civil
and large scale residential construction industry.
COAG also reiterated its commitment to reducing duplication
and double-handling of environmental assessment and approval processes while
maintaining high environmental standards that are risk- and outcomes-based. In
line with the timing agreed at the COAG meeting in April, consultations are
underway and negotiations for bilateral agreements are about to commence.
As we get closer to the end
of 2012, industry and the development sector eagerly await the discussion paper
and its recommended actions being prepared ahead of the next COAG meeting in
late 2012.
The Terms of Reference tabled at the July COAG meeting
attached the following timeline for the proposed cutting red tape reforms.
July to August 2012 -COAG determines terms
of reference and panel appointments.
September 2012 -Panel and secretariat
in place.
November to
December 2012 -Discussion paper
prepared and issued publicly to construction industry stakeholders.
April 2013 -Submissions received
from States and Territories and construction industry stakeholders. Panel
conducts meetings with key construction industry stakeholders.
May to June 2013 -Final report
prepared.
31 July 2013 -Final report
delivered to COAG for public release.
Submissions to the
discussion paper by industry stakeholders are encouraged given the implications
to the sector.
Clean, greenhouse friendly
energy such as wind, solar and biomass are critical in the fight against
climate change. Whilst the proposed COAG reforms in streamlining development
approvals for major projects are important in addressing the need for sustainable
development in a coordinated manner, it will be some time until the final
report is delivered and recommendations actioned.
Whilst the industry can
speculate over whether the work
to develop best-practice approaches to lift regulatory performance and policy
initiatives to meet the red tape challenge will better facilitate development
of major projects across the country; a key issue remains. Approvals for renewable energy projects
are critical and are required immediately. We need to act now if we are to
facilitate the development of these projects and in turn stand any chance in
reducing our emissions and achieve our renewable energy targets.
Tailoring the process to suit the project needs
Often major projects can take around 2 years to obtain the
relevant planning and environmental approval in Victoria by the time the
community is consulted, Planning Permits are granted and the relevant
environmental approvals obtained through the EES process. However, through
personal experience with the Mildura Solar Concentrator Power Station, which
was approved in Victoria a few years ago through a process that saw the project
fast-tracked through the system; it all depends on the approach by the project
applicant. This $420 million project will see the generation of 270,000 MWh per
year, enough for 45,000 homes and reduce greenhouse gas emissions by
approximately 400,000 tonnes per year. Before the formal application for the solar energy project
was lodged with the department, the community had been consulted, key
stakeholders informed and significant environmental assessment done.
So until current statutory processes are streamlined, proponents
will need to work their way through the statutory planning and environmental
system. It is advised that proponents plan for the planning and environment
approvals process in an integrated manner that elevates these projects to a
status of ‘State Significance’ and includes coordinated consultation across key
stakeholders, community groups and decision makers prior to the formal
commencement of the statutory application process. This includes discussions
with the relevant authorities to ensure timely connection to the grid.
There’s is no doubt Governments
at both State and Federal levels will need to address the need for a more
coordinated approach to major projects that will see a more streamlined
statutory approvals system however, if project proponents and investors play
their cards right, there is no reason why they cannot minimise risk and proposals
cannot get the green light quickly.
Gregoria Todaro, Director
Integrated Planning
Solutions
gregoria@integratedplanningsolutions.com.au
www.integratedplanningsolutions.com.au
Columbia University
“Target atmospheric CO2: Where should humanity aim?” Stockholm University
“Exploring the safe operating space for humanity”
