Thursday, 21 March 2024

National Electricity (Victoria) Amendment (VicGrid) Bill 2024

Introduction and first reading

The PRESIDENT (17:39): I have a final message from the Assembly:

The Legislative Assembly presents for the agreement of the Legislative Council ‘A Bill for an Act to amend the National Electricity (Victoria) Act 2005 in relation to VicGrid and for other purposes.’.

Harriet SHING (Eastern Victoria – Minister for Housing, Minister for Water, Minister for Equality) (17:40): I move:

That the bill be now read a first time.

Motion agreed to.

Read first time.

Harriet SHING: I move, by leave:

That the second reading be taken forthwith.

Motion agreed to.

Statement of compatibility

Harriet SHING (Eastern Victoria – Minister for Housing, Minister for Water, Minister for Equality) (17:40): I lay on the table a statement of compatibility with the Charter of Human Rights and Responsibilities Act 2006:

In accordance with section 28 of the Charter of Human Rights and Responsibilities Act 2006 (the Charter), I make this statement of compatibility with respect to the National Electricity (Victoria) Amendment (VicGrid) Bill 2024 (the Bill).

In my opinion, the Bill, as introduced to the Legislative Council, is compatible with the human rights protected by the Charter. I have this opinion for the reasons outlined in this statement.

Overview of the Bill

The primary purpose of the Bill is to amend the National Electricity (Victoria) Act 2005 (the National Electricity Act) in relation to renewable energy.

The Bill will amend the National Electricity Act to:

• confer new functions and powers on the Chief Executive Officer, VicGrid (CEO, VicGrid) in relation to planning for major electricity transmission infrastructure in Victoria, including a new transmission infrastructure planning objective, provide for the integration of the reforms into the existing national electricity transmission planning framework and provide for cost recovery of the CEO, VicGrid’s services;

• allow for the declaration of Renewable Energy Zones by the Minister; and

• introduce a process for the CEO, VicGrid to make payments to certain landholders who host transmission infrastructure on their land.

Human rights protected by the Charter that are relevant to the Bill

The Bill does not raise any human rights issues.

Consideration of reasonable limitations – section 7(2)

As the Bill does not raise any human rights issues, it does not limit any human rights and therefore it is not necessary to consider section 7(2) of the Charter Act.

Hon Ingrid Stitt MP

Minister for Mental Health

Minister for Ageing

Minister for Multicultural Affairs

Second reading

Harriet SHING (Eastern Victoria – Minister for Housing, Minister for Water, Minister for Equality) (17:40): I move:

That the bill be now read a second time.

Ordered that second-reading speech be incorporated into Hansard:

The Victorian Government is committed to managing the transition of the energy sector to achieve net-zero emissions by 2045 while ensuring the reliable supply of energy to Victorian consumers. Achieving this goal requires significant investment in the transmission network to connect and transport our new renewable energy efficiently to Victorians.

This Bill amends the National Electricity (Victoria) Act 2005.

The National Electricity (Victoria) Act 2005 is amended in the following areas:

CEO VicGrid

First, the Bill will confer transmission planning functions for renewable energy zones to the Chief Executive Officer, VicGrid (CEO VicGrid). The CEO VicGrid will also be empowered to assist the Australian Energy Market Operator (AEMO) in the performance of its functions, enabling VicGrid to conduct early works and facilitate investment in Victorian transmission projects.

Victorian Transmission Planning Objective and Victorian Transmission Plan

Second, the Bill introduces the Victorian transmission planning objective, which will guide the CEO VicGrid in their deliberations over transmission planning in renewable energy zones, in particular, the Victorian Transmission Plan. The requirement to publish a Victorian Transmission Plan, in which VicGrid analyses transmission infrastructure needs to accommodate new renewable generation in renewable energy zones, is the third thing the Bill introduces. The Bill details its contents as well as the process by which it will be produced.

The inaugural Victorian Transmission Plan will look to a 15-year horizon, whereas subsequent editions will look to a 25-year horizon. The first Victorian Transmission Plan must be published by 31 July 2025. The second Plan must be published by 31 July 2027, with subsequent editions due every four years thereafter.

There is also a requirement to publish guidelines on how the CEO VicGrid will go about preparing the Victorian Transmission Plan, including the scenarios it will study, key inputs, sensitivities, methodologies and assumptions, not to mention its consultation process with stakeholders.

These measures will provide transparency in the process, for identifying Victoria’s transmission infrastructure needs that will support Victoria’s commitment to net zero emissions by 2045.

REZ Declarations

Fourth, the Bill provides a process, including stakeholder consultation, by which the Minister will declare an area within Victoria to be a renewable energy zone (REZ). The purpose of a REZ declaration will be to identify the geographic area where renewable generation is likely to be of optimal benefit towards meeting Victoria’s net zero emissions targets. The declaration will also specify the proposed transmission hosting capacity within such a zone and preferred transmission corridor and other matters. Hence, the analysis carried out by the CEO VicGrid for the Victorian Transmission Plan will also inform Ministerial declarations. Declarations will also be subject to consultation with industry and consumers and declarations will be published with reasons.

Collaboration with the Australian Energy Market Operator

Fifth, the Bill requires that the CEO VicGrid cooperate with the Australian Energy Market Operator in performing their respective functions.

Landholder payments

Sixth, the Bill provides for payments to landholders who host new transmission infrastructure through a scheme of annual payments for 25 years. The Bill provides for the criteria for eligible landholders to be prescribed in regulations. This will include landholders of private land hosting new easements for transmission infrastructure. In addition to such private land holders, eligibility will include holders of certain rights and interests with respect to Crown land hosting new transmission infrastructure to be prescribed in regulations.

The payments are designed to facilitate the development of new transmission infrastructure and are in addition to any compensation that landholders are entitled to under the Land Acquisition and Compensation Act 1986.

The framework will require ongoing payments of certain amounts, to be calculated in accordance with formulae in the Bill or to be prescribed in regulations, for 25 years, from registration of the easement and provides for the determination of eligibility and recovery of overpayments and administration of payments. Persons who are determined ineligible and are dissatisfied will also have an avenue of appeal to the Victorian Civil and Administrative Tribunal.

Cost recovery

Seventh, the Bill enables recovery of the CEO VicGrid’s costs from end users through transmission use of system charges. VicGrid’s costs will arise in developing the Victorian Transmission Plan and facilitating and enabling high priority transmission projects, and fees and charges for the recovery of VicGrid’s costs will be determined in consultation with the Premier, Treasurer and the Minister.

Other amendments

Finally, the Bill integrates the reforms into the existing national electricity planning framework. It also extends the time for the review of ministerial powers under section 16Y of the National Electricity (Victoria) Act 2005 to facilitate the procurement of major transmission infrastructure projects.

I commend the Bill to the house.

Georgie CROZIER (Southern Metropolitan) (17:40): I move, on behalf of my colleague Mr Davis:

That debate on this bill be adjourned for one week.

Motion agreed to and debate adjourned for one week.