The New South Wales government has announced a doubling of payments to private landowners who host major transmission links in an effort to remove a potential major roadblock to its plans to transition the country’s biggest coal fleet with renewables and storage.
The Strategic Payments Benefit Scheme unveiled by treasurer and energy minister Matt Kean will result in a doubling of payments to private landowner hosts of high voltage transmission to $200,000 a kilometre, to be paid out in equal instalments over 20 years.
That will total around $800 million for the estimated 4,000kms of new transmission links needed in NSW to transition the grid to wind, solar and storage. If other states follow suit, it could result in nominal payments of $2 billion to landowners across the country’s main grid.
“NSW has the most ambitious renewable energy policy in the nation, which is needed to replace the State’s ageing coal fired power stations and build a clean energy future for NSW,” Kean said in a statement.
“The scheme is part of our commitment to share the benefits of a reliable, clean and affordable energy grid with the landowners who will have a vital role in supporting the delivery of critical transmission infrastructure that will make this possible.”
The reality is that state governments have been fearful of a landowner backlash against new transmission lines, which are a core part of the Integrated System Plan outlined by the Australian Energy Market Operator, and supported by Labor’s $20 billion Rewiring the Nation program.
Landowner protests in Victoria, particularly against VNI West, also known as the Kerang Link (see photo above), have focused the minds of government authorities fearful of protracted negotiations and delays.
“We certainly recognise the growing concerns that they have,” Mike Young, the executive director of Energy Corp of NSW, told RenewEconomy.
“It doesn’t replace good consultation with communities, but it does recognise that landowners have an important part to play in this transition. They need to get a tangible benefit from this.”
The payments do not include separate fees for easements, one off payments based on land value and made under a separate act, but they approaching the estimated payments made by private developers seeking links from their wind and solar projects to the main transmission lines.
The new NSW payments will apply to all new 500kV and 330kV transmission lines, including the new link to South Australia, Project EnergyConnect, that has begun construction. That will equate to around $150 million in payments for that link alone.
Landowners are a crucial part of the renewable energy transition, because of the political clout, particularly via the National Party but also via community independents, and because they own the land.
Many already receive payments of around $6,000 a megawatt, each year, to host wind turbines.The NSW Strategic Benefits Plan effectively pays landowners $10,000 per kilometre, per year, for 20 years to host high voltage powerlines.
The location of the lines is subject to environmental and other studies. For instance, they are not expected to be sited along property boundaries, where neighbours would share the view but not the benefits.
The NSW energy transition plan – which will see at least 12GW of new wind, solar and storage – is heavily dependent on the creation of at least five new renewable energy zones, and delivering their output to major load centres such as Sydney, Wollongong and Newcastle.
“The whole transition to the renewable future depends on transmission,” Young told RenewEconomy. “There is no transition without transmission.
“We need to maintain social license. So here is an example of the NSW government doing something practical and meaningful for people hosting this infrastructure.”
One landowner who spoke to RenewEconomy, and who could be eligible to nearly $1 million in payments if the link goes through their property, described it as a great outcome for larger land owners.
“I would have objected a lot less vigorously to HumeLink if that was on the table,” they said, although they warned that smaller land owners who have lines close to their house but own a relatively short corridor may not be so happy.
Young said the payments of around $800 million would likely equate to around $250 million in net present value terms, reflecting the time value of money and the payment schedule, and would ultimately be paid by consumers, as the cost would be fed back through regulated assets.
“This is a huge win for landowners across NSW that will almost double the average payment they currently receive,” Kean said in his statement.
“And, importantly, the rate of the payments will be calculated in the same way regardless of where you live to ensure all landowners are treated equitably under the scheme.”
