The project was developed by Macquarie Asset Management’s Green Investment Group (GIG) and Shell Energy Operations and will be supported by a 20-year battery storage services agreement with Shell Energy for 100 per cent of the BESS capacity.

This follows similar deals, such as the Waratah Super Battery Project, Vena Energy’s large-scale BESS in Queensland and the development of the largest approved utility-scale grid-forming battery in Australia, among many other movements and developments in the clean energy and battery spaces.

In conversation with Lawyers Weekly following this deal, lead HSF partner on the Rangebank BESS transaction, Elizabeth Charlesworth, said that over the last year, she has seen an increased level of market activity on decarbonisation-driven projects, with an “ever-increasing size and scale of the clean energy and battery projects coming to market”.

“Looking back five years, there hadn’t been any commercially project financed battery projects in Australia, but there are a number of battery projects which we expect will reach financial close in the coming year — hopefully including some of the eight big ‘grid forming’ batteries backed by ARENA (all 200MW or larger),” she explained.

“We are also seeing clients seeking to couple solar farms with batteries, and we expect this to continue as part of the evolution of these technologies.”

Amid the rise of the clean energy space and ESG issues increasingly making their way into boardrooms, these types of deals, along with wind and solar projects and green hydrogen, will reportedly aid in reducing organisations’ carbon footprint.

However, Gilbert + Tobin partner Michael Blakiston — who spoke about decarbonisation and clean energy on The Lawyers Weekly Show in 2021 — said that the rise of these projects in Australia comes with their own sets of challenges.  

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“Decarbonisation and clean energy require the generation of electrons, be they generated from green energy (wind and solar) or blue energy (gas). Those electrons then need to be put through an electrolyser which effectively breaks the hydrogen away from water. This process is one where there is proven technology, but not of the scale which is now envisaged. Projects are now focusing on multibillion-dollar expenditures, which need to be built in order to generate the amount of hydrogen needed to replace existing energy sources,” he explained.

“In the case of batteries, the issue here is that Australia has large deposits of lithium and, although present, lesser deposits of copper, nickel, zinc, cobalt graphite and vanadium, to name a few. In order to capture the value chain associated with the downstream processing of these minerals into materials which are the components for battery construction. This processing requires a complex chemical plant with all of its inherent complexities.”

Moreover, Mr Blakiston said that there is currently debate about whether Australia can “actually become a battery manufacturer” despite having the means to become a significant supplier of materials.

“Apart from the massive amount of capital required to construct these types of plants, they are technically complex and require skilled labour. Australia does not currently have the depth of skilled labour to support the number of potential projects. 

“Australia has the potential to be a world superpower through the generation of clean energy, given our abundant endowment of solar and wind. We need to capture that, turn that energy into electrons that are capable of supplying cheap power, an essential input into converting ore to minerals which are capable of being fed into a supply chain,” he added.

“It goes without saying that Australia has a significant amount of land which is not being utilised to its highest and best value. This observation does not recognise the role of our First Nations People, as before we can truly believe we can use much of the country for the purpose of energy generation, the prior and informed consent of our First Nations People is required.”

Therefore, the legal implications for First Nations People on greenfield projects — projects started from scratch on empty land — can be varied.

“A key implication is for our First Nations People and the pressure which will be put on them to access their land. In the past, governments have been prepared to use their compulsory acquisition powers to access land for industry and development,” Mr Blakiston opined.

“As we approach the question of whether or not to alter our Constitution to give importance to the Voice, the issue of compulsory acquisition is a very real demonstration of whether or not the Voice will mean anything. It is clear that when dealing with First Nations Peoples’ rights, we need to deal with it in an environment of free, prior and informed consent and so that will represent a major issue for developers of these projects.”

Greenfield projects — which start from nothing — are not immune to other obstacles, either, but there are a number of factors driving these projects, including the current government’s energy policy and a global drive towards energy transition.

“Greenfield development projects are complex, and each project is bespoke. These sorts of transactions require lawyers to work collaboratively across various practice specialities, from real estate, planning and environment through to corporate structuring, regulatory, project procurement, financing and security, stamp duty and tax,” Ms Charlesworth outlined.

“It is also important for the front-end lawyers to engage with their disputes colleagues to understand and better provide for the sorts of challenges that can arise during the life cycle of these projects. In addition to the rise of greenfield projects, we are seeing a lot of activity in the M&A space resulting in consolidation of market participants as well as new international players entering the Australian market.

“We are also seeing larger corporates seeking to maximise their exposure to the sector and secure a pipeline of development projects by working with grassroots developers from a much earlier stage of development.”

There is a myriad of other issues that impact clean energy, decarbonisation and battery projects, many of which, according to Mr Blakiston, have already played out in relation to the potential of transitioning from existing energy sources — like gas — to clean energy.

“There is a transition, and some see an almost immediate transition to green as being possible, but this is not possible. Gas will be part of the solution for a prolonged period of time as we build up the capacity to generate clean energy. Apart from the usual issues of project development, the ability of lawyers to adapt to how we in Australia position ourselves internationally will be something [that] partners of law firms will need to grapple with. 

“Although there are similarities with development booms of the past, it’s fair to say society no longer accepts a development-at-all-cost approach, and so the social licence to operate is a significant issue. This is something that is not just focused on First Nations People but also our communities as a whole. Lawyers need to develop the capacity to balance the expectations of multiple stakeholders,” he explained.  

“Lawyers also have an opportunity to be incredibly entrepreneurial in their approach to clean energy and decarbonisation. As is the case in some many fields, there will be a significant number of lawyers who will not seize the opportunity, rather they will wait to see how things develop and, in doing so, will miss their opportunity to become leaders in the field rather they will need to catch up with change, change that is inevitable. It may well represent a threat to the business model for a number of law firms.”