The transition from coal to renewables in New South Wales – home to Australia’s biggest state grid – faces significant delays because wind and solar developers say it is increasingly difficult to secure planning approval for new projects.
NSW has possibly the most ambitious renewable roadmap, seeking to replace four, if not all five, of its ageing coal generators that are expected to close within a decade.
To do this, it needs at least 12GW of new wind and solar capacity by 2030, and it potentially has an embarrassment of choices – more than 100GW of projects have shown interest in the state’s new renewable energy zones. But very few of these projects have planning approval.
A report distributed this week by analysts Rystad Energy says approvals for utility scale wind and solar projects in Australia have plunged by 75 per cent since 2018, compounding the challenges faced by developers which include supply chain issues, transmission project delays and a shortage of storage capacity.
Rystad says NSW is the most heavily impacted by delays in project approvals, because of its more challenging approval processes.
Its report says NSW approvals are running at less than half the 1.7 GW a year needed, “putting it at real risk of not approving enough capacity in time to meet its 2030 target of 12GW of operational utility solar PV and wind.” As the graph above shows, wind project approvals are proving particularly difficult.
The situation has so frustrated project developers that 40 of them – comprising virtually every serious renewable developer in the state bar two that RenewEconomy is aware of – have banded together to seek meetings with the planning and energy ministers to resolve the issue.
There is concern also over new wind farm guidelines that may make more difficult to get approval for projects, including new rules on “visual amenity” and setbacks, and a new rule that project developers must “anticipate” potential new dwelling sites in land that has the potential of being sub-divided.
The group says it has sought the opportunity to discuss their concerns with the planning minister and have not heard back.
John Grimes, the CEO of the Smart Energy Council, said the NSW government is in danger of falling short of its renewable energy targets.
“They should be alarmed,” Grimes said in an emailed statement.
“While the Rystad report is only inclusive of the previous government’s planning approvals, drastic change is required from the NSW Planning Department to account for that glaring shortfall in clean energy project assessment.
The apparent disconnect between the stated plans of the state energy ministers and the planning ministers has apparently existed for some time – both in the previous state Coalition government and the new Labor government that was elected earlier this year.
Project developers suspect this has something to do with the fact that the planning minister has to deal with regional communities and National MPs, who often oppose new wind, solar and transmission projects, but is also due to “cultural” issues within the department.
Many project developers say they have simply been unable to lodge their planning applications, and some are frustrated by the practice of “verbal” updates that have sent some back to the drawing board, often for what they say are the most trivial of reasons.
One wind farm developer was told – eight months after lodgement – that they would need visual assessment of three houses 3.5 kms from the wind project. This was despite the fact that they had been refused entry to the properties and had already conducted surveys at the start of their driveways, closer to the planned project.
“NSW should be an easier state to get planning approval, because there has been less wind and solar development here than in other states, and it has got through less of the low hanging fruit,” said one developer.
Some of these issues have been highlighted in the Rystad Energy report, which notes that planning departments are asking for too much information, much of which is not needed or even known with reasonable certainty at the time of lodging a development application (DA).
Rystad also said planning departments are often rescheduling or cancelling site visits needed to allow developers to progress their DA, and the need to engage other government agencies prior to lodging a DA is adding further time and complexity because these agencies are often not adequately resourced.
“Planning departments are often rejecting the lodgment of DAs to satisfy internal timing metrics associated with evaluating DAs from lodgment to decision,” the report says. “Multiple participants commented that this was a particular problem in NSW.”
It noted that NSW is pushing developers to install their projects at more challenging locations, leading to more issues with biodiversity, topography geotechnical and cultural heritage, adding to time and cost. The cost of DAs has increased substantially, particularly in NSW.
Rystad says its data shows that solar and wind project approvals re now taking 1.5 to 2 years on average, compared to 6-12 months previously, and is also adding more costs.
To be sure, Rystad noted that NSW was not the only problem state. Planning applications were proving more difficult to obtain in Victoria as well.
Queensland is the only state in which project approvals have consistently outpaced the capacity required to meet its state-based renewable target of 50 per cent by 2030. It should be noted that that is also the lowest renewable target of any state in the country.
RenewEconomy approached planning minister Paul Scully and his department for comment, and is awaiting a response. It has also reached out to the office of energy minister Penny Sharpe.