On behalf of Mr Jihad Dib: I move:
That this bill be now read a second time.
I am pleased to introduce the Energy Legislation Amendment Bill 2025. New South Wales is transforming its energy system. As our ageing coal-fired power stations retire, we are upgrading our electricity grid to ensure a secure supply of clean, reliable and affordable energy for New South Wales households and businesses. We are fortunate in New South Wales to have a bipartisan commitment to deliver the Electricity Infrastructure Roadmap and the benefits it will bring to our State. An unprecedented level of investment is required to ensure that we have sufficient generation, storage and network capacity to keep the lights on and continue to grow the New South Wales economy.
The importance and urgency of delivering critical energy infrastructure projects like the renewable energy zones on time is hard to overstate. The recent Transmission Planning Review found that the current planning and approval arrangements for renewable energy zones are overly complex, creating uncertainty for investors, project proponents and host communities. This leads to delays and, in the end, higher costs for New South Wales electricity consumers. To fix this, the review made a number of recommendations for immediate reform. I am pleased to say this bill delivers on these important reforms to give the certainty needed for renewable energy zones to proceed. At this point, I acknowledge the work of Legislative Council Portfolio Committee No. 4 – Regional NSW, whose first report into the impact of renewable energy zones on rural and regional communities was tabled in August this year. The Government takes the inquiry's findings seriously. This bill furthers the Government's efforts to date to ensure that communities who are supporting the energy transition are properly recognised and supported.
The bill expands eligibility and supports delivery of benefit‑sharing programs so that communities and landholders adjacent to new infrastructure and renewable energy zones can benefit. The bill also allows investment in local employment, skills and training across impacted regions, not just for workers directly affected by the transition but for anyone seeking new skills or job opportunities. New South Wales's energy transition is not just about the rollout of large infrastructure; it is also about getting energy right at the consumer level. Across New South Wales, more households and businesses are generating and storing their own power than ever before. Rooftop solar and home batteries are helping to cut costs, strengthen reliability and change the way energy is produced and used.
I am pleased to say the bill also implements recommendations from the 2024 review by the Independent Pricing and Regulatory Tribunal [IPART] into embedded networks and strengthens protections for households with rooftop solar. IPART's review found that customers in embedded networks, such as apartment buildings, retirement villages and caravan parks, often face higher costs and weaker protections than those in the wider retail market. In response to those findings, the Government will be putting forward a regulation to amend the National Energy Retail Law to introduce maximum retail prices for the sale of energy, hot water and centralised air conditioning. The bill supports these changes by introducing an enforcement and compliance framework to give effect to these price caps The bill also protects households with rooftop solar from being disadvantaged as two‑way pricing is introduced. It makes clear that customers will not be worse off for exporting the energy they generate, so families who have invested in solar can continue to lower their bills and contribute clean power back into the grid.
I am proud that the bill will support some of our State's most vulnerable residents to access a better deal for energy and will bring fairness to consumer protections. Finally, the bill makes a number of other minor amendments to streamline processes and approvals, reduce red tape, improve consumer protections and ensure the effective delivery of our net zero and energy targets. I also acknowledge that the Government supported some amendments to the bill in the other place. The Minister and I are grateful to the Opposition and The Greens for their constructive engagement on the bill.
I now turn to the contents of the bill. I will address each schedule to the bill individually. I turn first to schedule 1, which amends the Electricity Infrastructure Investment Act. Under the current legislation, access to community and employment benefits is only available to organisations within the geographical boundaries of a renewable energy zone where an access scheme has been declared. This means that funds collected to provide community and employment benefits cannot be spent in nearby towns and centres which service communities that are also sharing the heavy lifting of infrastructure development. This arbitrarily prevents delivery of community programs and services where they can be most effective. The bill makes these arrangements fairer and more practical, by expanding the definitions of "community" and "employment purpose" so that programs can be delivered anywhere in a local government area or local Aboriginal land council area that is partially or fully within a renewable energy zone. These changes will ensure that benefits are distributed more equitably across all communities in New South Wales that are hosting new infrastructure.
Delivering the transmission lines required to connect new renewable energy projects is a significant task. To succeed, the processes for approving and delivering new infrastructure projects must be a match for the scale and urgency of that task. If processes are slow or uncertain, projects get delayed, costs rise and the benefits of cheap, clean and reliable energy for New South Wales are put at risk. The bill introduces a change to the authorisation process for renewable energy zone network infrastructure projects to address this. To be clear, the bill does not affect the need for development consents through the planning system. The bill requires the independent Consumer Trustee to authorise a renewable energy zone network infrastructure project, rather than authorising a network operator to carry out a project. By separating out the authorisation of the project from the appointment of a network operator, the project's authorisation can occur earlier in the development process.
The bill also codifies the existing practices for the infrastructure planner to appoint one or more network operators to carry out a project, or parts or stages of a project. The bill provides for the infrastructure planner to recommend to the Minister when a network operator should be directed to carry out a project, provided that project has been authorised. Regulations are able to provide for further details about when and how this occurs. The bill further streamlines authorisations by removing duplicated functions of road map entities in line with other recommendations from the Transmission Planning Review. Together, these reforms deliver a faster, clearer and more efficient authorisation process. This will allow network operators to commit to projects with confidence. The projects are more likely to proceed on schedule, and consumers will benefit from a more timely and affordable energy transition.
Our coal-fired power stations provide not only electricity but also essential system security services that keep the grid stable and operating smoothly. As we move to a system powered by renewables and storage, these services must be provided in other ways. System strength is what allows the network to remain stable when disturbances or faults occur, such as lightning strikes or the sudden loss of a generating unit or transmission line. System strength is managed under the National Electricity Rules. However, those rules do not enable the Australian Energy Market Operator to set system strength requirements for networks in New South Wales that are not owned by Transgrid.
The bill creates a head of power to allow New South Wales to derogate from the National Electricity Rules to create a clear framework to manage system strength in renewable energy zones. As coal-fired power stations retire, long duration storage becomes increasingly critical to ensure that electricity supply remains reliable for extended periods when the wind is not blowing or the sun is not shining. Under the National Electricity Rules there are several different definitions of a generation or storage project's capacity to generate electricity. At present, the definition of long duration storage does not reflect how some different technologies may operate. That has created uncertainty for investors. The bill resolves this by clarifying that long duration storage must be able to deliver for at least eight hours at the lower of its registered or maximum capacity.
The infrastructure planner plays a central role in planning and delivering the renewable energy zones and other priority network infrastructure projects that underpin delivery of the road map. It is critical that the infrastructure planner has a stable and efficient funding base to do its job. At present, the infrastructure planner's funding arrangements are fragmented and inefficient. In effect, this means much of the cost is financed indirectly by the network operators and recovered from consumers. This reliance on private financing creates uncertainty and ultimately drives up long-term costs for households and businesses. The bill establishes a more efficient and certain funding model for the infrastructure planner. This change reduces reliance on more expensive private finance and lowers risks to consumers, while giving the infrastructure planner the stable funding it needs to plan and deliver new network infrastructure on time. The bill also provides the ability for the secretary to delegate and sub-delegate functions under the Electricity Infrastructure Investment Act.
I turn to schedule 2 to the bill, which amends the Electricity Supply Act. The bill will introduce a head of power to enable the Minister to issue the Accredited Service Provider, or ASP, scheme rules. This provides greater clarity to industry that the Minister can update and issue the rules. The bill does not amend the scheme rules themselves. The bill also provides a guarantee to households with rooftop solar that they will not be charged for exporting their excess electricity generation to the grid. Following rule changes in 2021, there are concerns that households and other customers could end up being charged for exporting electricity in the middle of the day, when solar generation is at its peak. This bill ensures this can never happen. Families who invest in clean energy will have certainty that they will not be penalised for making a direct contribution to decarbonising our grid.
As I have said, across New South Wales we are building some of the most significant transmission projects in a generation. No single network business has the capacity to build the scale of infrastructure required to facilitate this transition. That is why the Electricity Infrastructure Investment Act enabled the introduction of contestability into the transmission sector. The National Electricity Rules were not designed with the contestable framework in mind. This has already created challenges in connecting the Central-West Orana Renewable Energy Zone to the existing transmission network.
This bill will enable the Minister for Energy to issue network-to-network connection guidelines and impose a licence condition to require compliance with those guidelines. There are also changes to the enforcement and compliance regime, including enabling IPART to issue higher penalties. These reforms will help ensure that renewable energy zone networks and other priority network infrastructure projects are connected to the New South Wales grid on time and on fair terms. It will cut inefficiency, reduce investor risk and, most importantly, allow renewable energy to flow when and where it is needed, putting downward pressure on energy prices and helping us to keep the lights on as coal-fired generators retire.
The Strategic Benefit Payment Scheme requires holders of a transmission operator licence to make compensation payments to landholders who host transmission infrastructure on their land. This bill makes amendments to provide for flexibility regarding the types of landholders who can receive payments under the Strategic Benefit Payment Scheme where they are impacted by high-voltage transmission.
The bill will implement important consumer protection reforms from the Government's Embedded Network Action Plan. Many people in New South Wales buy their energy in a different way to a typical household. Instead of having a direct account with an energy retailer and therefore choice in who that provider is, those customers in embedded networks can only purchase their power from the embedded network operator. This arrangement is common in places like retirement villages, social housing complexes, caravan parks and apartment blocks. Many efficiencies come with those arrangements. However, the problem is that people in those situations often do not have the same rights and protections as other on-market customers. They can be locked into higher prices, with no clear billing information breaking down what they are paying for.
Too often those people are some of the most vulnerable people in our community and can include older residents, people on low incomes or those living in affordable housing. Yet they have the fewest protections. This bill fixes that. Under the action plan, customers in embedded networks will pay prices broadly equivalent to competitive market offers, have similar consumer protections to on-market energy customers, and access to national and New South Wales energy rebates and payment support programs. Those changes will be implemented through regulations later on. The bill introduces a compliance and enforcement framework to ensure that the regulations can provide meaningful protection to customers of embedded networks. Customers will also have access to free and independent dispute resolution through the Energy and Water Ombudsman NSW and access to clear information about their energy usage and costs.
Network operators play a crucial role in delivering the transmission backbone that keeps power flowing to homes and businesses across New South Wales. The bill makes some practical improvements to the way network operator licences are considered and issued. First, it reduces the consultation time frame for a licence application from 40 days to 28 days from the date the notice is published, in line with similar public consultation periods. It also updates the reporting requirements, while keeping the decision process transparent, efficient and fit for purpose. Schedule 3 to the bill amends the Electricity Supply Act and the Electricity Supply (General) Regulation to align the existing Renewable Fuel Scheme with green hydrogen production that is expected to start in 2027.
Changing the year the scheme starts to 2027 and reducing the 2027 target ensures that the scheme accounts for the latest forecast for initial green hydrogen production in New South Wales. Those changes ensure that costs are not passed on to gas consumers until there is hydrogen available in the market. The amendments are narrow in their scope and are intended to enable the effective operation of the Renewable Fuel Scheme for hydrogen. The New South Wales Government remains committed to supporting the establishment of a strong renewable fuels sector, and I look forward to announcing further reforms in this space shortly.
Schedule 4 to the bill makes an amendment to the Independent Pricing and Regulatory Tribunal Act [IPART] Act to provide further regulatory functions to IPART. This amendment is consequential to amendments under schedule 2 to support delivery of the embedded networks reforms. Schedule 5 to the bill amends the National Electricity (New South Wales) Act to allow regulations to modify the National Electricity Rules so that events affecting strategic benefit payments can be treated as "pass through events" for cost recovery. That means that if an event reduces the amount of strategic benefit payments, such as when privately owned land is transferred to the Crown, those savings can be passed on to New South Wales consumers; or, if an event increases payment obligations, such as when native title is granted over eligible land and back payments become due, those additional costs can be recovered by the transmission operator. These changes ensure that consumers pay only the fair costs of the energy transition and align the national framework for cost adjustments with the cost recovery provisions in the Electricity Infrastructure Investment Act.
Finally, schedule 6 to the bill amends the Residential (Land Lease) Communities Act to make amendments that are consequential to amendments that will be made by regulation to the National Energy Retail Law (NSW) under the National Electricity Retail Law (Adoption) Act 2012. These amendments support the embedded network reform package to deliver fairer electricity costs for customers of embedded networks.
The bill reflects this Government's commitment to a fair, efficient and reliable energy transition that puts people first. It delivers practical, balanced reforms that will streamline the rollout of transmission infrastructure, unlocking generation from renewable energy zones to deliver a secure and stable grid. For regional communities, the bill means real, tangible benefits. It expands benefit-sharing so that more communities see lasting returns from hosting energy infrastructure. It strengthens protections for households and small businesses, building the trust and social licence that are essential for long-term success and ensuring that no-one is left behind as we move towards a cleaner energy future. The bill ensures that New South Wales will not just manage the shift to renewables; it will lead it, with cleaner air, stronger communities and a more dependable electricity system for every home and business. That is why it is essential that Parliament passes the bill and allows these reforms to proceed without delay. I commend the bill to the House.
