Renewable energy sector to grow, lawyers to thrive under Labor government

Led by Prime Minister Anthony Albanese, the Labor government went to the May election with an ongoing commitment to renewable energy and a plan to see 82 per cent of renewable energy in the Australian power grid by 2030. According to the Department of Climate Change, Energy, the Environment and Water, it was at 32 per cent in 2023.

According to corporate partner Joni Henry, the Labor government’s clear policy frameworks around renewable energy and gas projects provided investors and those who work across the industry with greater clarity and transparency “around where the priorities lie”.

“For lawyers and law firms in the renewable energy space, this will create opportunities to work on ground-breaking projects across the country, many with international investors,” Henry said.

Henry added the sector will also see a “continuing evolution of legislation”, which would allow projects to happen, “especially in the areas of environmental law, planning and, work health and safety”.

Over the next term, the Labor government will work to expand Renewable Energy Zones (REZs) and support investment in transmission – a critical factor delaying the energy transition – under the $20 billion “Rewiring the Nation” fund, Henry explained.

VIEW ALL

The corporate partner said this was in addition to the $8 billion investment in renewable energy and low-emissions technology and a $2 billion expansion of the Clean Energy Finance Corporation.

On top of the investments, the Albanese government has planned to progress the nature-positive reforms of federal environment laws, target energy affordability for consumers, and add an extra incentive for green hydrogen. The latter would include a tax incentive and revenue support for large-scale renewable hydrogen projects.

In the lead-up to the election, the Labor government said it would invest more than $800 million in production incentives for the development of a green hydrogen project in Western Australia. Henry said it was the first to receive funding through the revenue support.

Planning and environment partner Kirstie Richards said energy-focused lawyers “should continue to be very busy” in a range of areas.

“We expect to see ongoing policy developments in relation to Renewable Energy Zones, offshore wind and approval processes at both a federal and state level. Renewable energy developers will need to stay informed on the implications of the ever-evolving policy,” Richards said.

Looking ahead to the next few years, Richards said there would be a continuing need for planning reform to allow for renewable energy projects to be developed in a timely fashion, “while continuing to ensure robust assessment and stakeholder engagement”.

Richards also predicted focus by regulators on the health and safety of project worksites, particularly large-scale solar and wind projects. There has already been scrutiny in the past 12 months, but Richards said she expects this to increase as projects continue to rise.

On the back of the last election, Henry said the Australian renewable energy sector will enter a “period of greater policy stability”.

“As a firm with extensive global experience in the energy sector, we are excited by the possibilities of this greater certainty for renewable energy in Australia and look forward to working alongside our clients to play a role in helping Australia reach net zero,” Henry said.

What the sector would have looked like under a Liberal government

At the election, the “central tenet” of the Coalition government’s energy policy was the introduction of nuclear power and a “ramping up” of domestic gas production, corporate partner Tim Dorgan said.

Under that plan, the Coalition would have focused less on solar, wind and hydro energy over the next two decades, “in return for achieving net zero emissions one year earlier” than Labor’s 2051 target.

According to its media statements prior to the election, the Liberal government claimed nuclear energy was the “key” to achieving net-zero emissions sooner. Coalition said it would have integrated renewables, increase large-scale solar and wind capacity, and protect regional communities from what it said was “overdevelopment”.

“This approach, if successful, would have tested the appetite for investment in renewable energy, [and] placed strain on the aging fossil fuel fleets, including exiting coal-fired plants, many of which are approaching end-of-life and have inadequate ash storages.

“However, the policy was much criticised for its lack of detail and realistic costings or time frames to deliver sufficient nuclear power to enable net zero by 2050,” Dorgan said.

Having split from the Nationals, Dorgan said the Liberal Party indicated it would be unlikely to retain a nuclear policy post-election.

How the sector has already changed under Albanese

The year 2024 was the biggest for clean energy investment since 2018, with more than $9 billion invested in projects and more than 10,000 jobs created, according to the Clean Energy Council.

Dorgan said the “biggest achievement” of the Labor government during its last term was bringing greater policy development to the sector, “by providing new financial incentives for the private sector to build the projects needed to make renewables a reality”.

The government legislated emissions targets to give developers greater confidence their investment “will be supported in the long-term at a macro-policy level”. Dorgan said it has also developed new incentive schemes to accelerate investments in renewable energy generation and clean dispatchable capacity, such as battery storage.

States were given agency to ensure greater energy security as the transition continues, “by giving the owners of coal-fired plants clarity when they need to close and provide those owners with assurances of other potential revenue streams via renewable projects”.

For lawyers, Richards said rising investments in property, planning, energy and projects meant legal professionals were working hard to help their clients get projects “shovel ready and into the build phase”.

“This has also created significant work for corporate and finance teams advising on the acquisition and financing of projects,” she said.

Richards added joint ventures at an earlier stage of a project’s life have become more prevalent as the capacity investment scheme, REZ access rights processes and similar schemes “require a level of resources that tend to favour larger projects and balance sheets”.

“Joint ventures are one way for parties to share such resources and risks,” Richards said.