TRANSCRIPT

ENVIRONMENT AND NATURAL RESOURCES COMMITTEE

Inquiry into the approvals process for renewable energy projects

Adelaide — 28 September 2009

Members

Ms J. Duncan Mr J. Pandazopoulos Mrs C. Fyffe Mrs D. Petrovich Mr C. Ingram Mr M. Viney Ms T. Lobato Mr P. Walsh

Chair: Mr J. Pandazopoulos Deputy Chair: Mr C. Ingram

Staff

Executive Officer: Ms C. Williams Research Officer: Ms T. Burton

Witnesses

Mayor M. Braes, and Mr F. Brennan, chief executive officer, Wattle Range Council.

28 September 2009 Environment and Natural Resources Committee 229 The DEPUTY CHAIR — I declare open this hearing of the Environment and Natural Resources Committee inquiry into the approvals process for renewable energy projects in Victoria. I welcome the Wattle Range Council mayor, Mark Braes, and the chief executive officer, Frank Brennan. All evidence taken at this hearing is protected by parliamentary privilege as provided under the Constitution Act 1975 and is further subject to the provisions of the Parliamentary Committees Act 2003. Any comments you make outside the hearing may not be afforded such privilege. All evidence given today is being recorded, and you will be provided with a proof version of the transcript in the next couple of weeks.

Cr Braes, would you like to make a statement to the committee before answering some questions?

Cr BRAES — Yes. Thank you for your welcome. I am happy to do that and grateful for the opportunity to present to you today. Development of wind farms in our council area probably goes back to about 1989 when a local developer came into the region; Paul Hutchinson was his name. From my recollection Paul had been looking for potential sites for developments around the whole of Australia and ascertained that an area behind Lake Bonney in our area had prime wind potential.

There are presently about 129 turbines spinning around day to day, producing about 300 megawatts of electricity, which represents about one-eighth of ’s present energy needs. Total expenditure on those projects is about $546 million, with each costing about $4.2 million. Babcock and Brown’s development was the first wind farm development in Wattle Range, and it has a rated capacity of about 240 megawatts, making it one of the largest in the world. As I said, that equates to about one-eighth of the state of South Australia’s total electricity demand or approximately one-sixteenth of the state’s total electricity demand during an extremely hot summer’s day. The wind turbines have a blade span of 33 metres and are 100 metres above the ground, weighing some 6 tonnes, with the total weight of the wind turbine being about 23 tonnes. One windmill generates enough power for about 1100 homes.

As I said earlier, the work on the Lake Bonney wind farm commenced in about 1989 when Paul Hutchinson brought a team of three overseas consultants to assess the Lake Bonney site. Development approval was granted in June 1999 by council, and in September 2004 the wind farm was commissioned with 46 wind turbines originally becoming operational. All electricity from the windmills is connected by an underground 33 000 volt electricity cable to a $10.5 million wind farm electric substation where the voltage is stepped up to 132 000 volts and then transmitted into the Snuggery substation and then into the national grid.

Stage 2 of the Babcock and Brown Lake Bonney wind farm will see the addition of 60 wind turbines. The at Lake Bonney was a separate development which represented diversification of International Power’s energy business in Australia. The Canunda wind farm, commissioned in 2005, consists of 23 two-megawatt wind turbines with each blade spanning 33 metres. The farm spans an area 8 kilometres long by 3 kilometres wide and is linked to the ETSA distribution network at the Snuggery substation. Annually the wind farm producers 36 megawatts and would power about 30 000 homes. There is a greenhouse gas saving of about 140 000 tonnes of CO2.

That is a general, broad sweep of the history of it. The only other comment I would make as the mayor before giving the CEO an opportunity to talk more about the planning processes and technical matters is that the land these turbines are on is marginal farming land. Although visible from the nearby town of Millicent and other areas it is not directly adjacent to heavily populated areas. There was very little, if any, opposition right from the first stage. It was clear to me back in 1999 when I first came to council as a councillor that Paul Hutchinson, the individual, was driven to develop wind energy. He threw all his money, time and effort into this, and he did a lot of work with the landowners very early on. Engagement with the landowners was done early, as was engagement with the community and not just the council. To me, coupled with the reality regarding the use of that land, was one of the reasons there was very little resistance to the development.

My sense is also that the Wattle Range Council area, or the south-east or limestone coast or whatever you want to call it, is an area where people are looking for development and have historically, so there has just not been the widespread community resistance that I have seen in other areas around Australia. My recollection is that apart from one landowner who opposed it — and you can see that there is a gap between the turbines in one section — all of the other landowners who were approached were happy to participate in the process. With that I will hand over to the CEO.

28 September 2009 Environment and Natural Resources Committee 230 Mr BRENNAN — Thank you for this opportunity. I will try to address the specific dot points that came up and the role of council in assessing and progressing renewable energy projects. Council is primarily a planning authority under the provisions of the Development Act 1993 and is responsible, through its development assessment panel for the assessment of development applications that come before it. Under that act, council is required to appoint a development assessment panel which consists of four independent members and three councillors or staff members of the council.

When that first came about I was a bit ambivalent about whether it was a good or bad thing. However, Wattle Range Council has had over a period of time an active role in promoting economic development, so I think the independence of the development assessment panel removes that potential conflict around council being the planning authority while also promoting development in its region.

Under the legislation there are two possible paths available for developers, especially with large-scale projects such as wind farms. One is major project status under the act. They have to make application through the Development Assessment Commission and ultimately the minister to become a major project and then through council as the local planning authority.

When we get a development application we assess it against the provisions of the development plan, which is probably third in the hierarchy of the legislation. First of all you have the act and regulations, then you have the state’s planning strategy, which is broken down into subregional strategies — we have one for the limestone coast region of the state — then you have your development plan, which is for your local council area. They are created and amended by local councils in consultation with the local community and government agencies through a process called the development plan amendment process or DPA for a short.

While this is being promoted as a bottom-up process, driven by the local community, in reality the experience has been that it is probably a bit of a bottom-up and top-down process where the resulting changes to development plans can be pervaded by much state government policy, including the insertion of provisions relating to a whole range of things including in recent times matters dealing with renewable energy projects.

Our plan contains provisions in relation to renewable energy projects, that in a general sense are about minimising adverse impacts and maximising positive impacts on the environment, the local community and the state. Under the legislation the process also requires us to mandatorily refer certain applications to government agencies, depending on what they may be. In the case of wind farms referral is predominantly to the Environment Protection Authority in relation to those renewable energy projects. Under legislation we have a three-month statutory time frame for making a determination unless we ask for further information, at which time the clock stops, if you like, for that three-month period.

The development plan is the primary document against which councils assess development applications, and once again there is a hierarchy of provisions. There are council-wide provisions — for example, our renewable energy provisions are not within particular zones; they are at a higher level, depending on where you want to go. Renewable energy projects are merit based in all of our planning zones, as opposed to complying or non-complying. You end up with council-wide provisions at a higher level and then specific zone provisions. Within the zones there are zone objectives, principles of development control and procedural matters, which include complying, non-complying and notification issues. All of our renewable energy projects have been described as category 3, so there is full public notification to landowners who are impacted, adjacent landowners likely to be impacted — so all adjoining landowners — and a public notice in the local paper. It is open to anyone to make a representation if they think It appropriate.

The approvals process has been developed significantly since our area was discovered to have potential for renewable energy projects because of the natural climatic conditions. On top of some of those hills you would blow the dog off a chain on a reasonable day. We have the potential for biomass technologies because of our plantations and for geothermal energy because of the volcanic activity there has traditionally been around our area.

In the early days of the Lake Bonney stage 1 project in 1999, development plans and government agencies had little policy around renewable energy projects, especially wind farms; they happened elsewhere, so it was a bit of a pioneering experience from the perspective of Wattle Range Council. We drew on advice from government agencies and tried to adapt different policies, especially around noise, which was probably more around industry

28 September 2009 Environment and Natural Resources Committee 231 based in specific areas, whereas wind farms were large-scale, very open and set out over many square kilometres. So there was a lack of policy. My perception is that there are no real weaknesses; it is very open and transparent.

One of the weaknesses I find in the approval process is that from the time people come down and assess the available wind energy and develop a project to a development application stage, let alone achieving financial close, we can grant a development approval that primarily lasts for 12 months, unless you substantially commence it within 12 months and substantially complete it within three years. By the time some of these projects achieve financial close, potentially their development approval can lapse, so you tend to get applications all the time for extensions. I think with the initial one at Lake Bonney, we said it was commissioned in 2004, so that is five years from issuing the approval to commissioning it, and there were probably two or three years in getting financial close for that particular project.

I basically said the area has promoted itself because of its location and natural features. Council has been very active in promoting the region and probably cajoling developers, but I think the area itself has been focused on renewable energy. I suppose we cajole a lot of the developers along, saying in effect that their area is the best area in Australia — and of course every council area believes theirs is the best. But the virtue of doing business in our council area has been that in establishing relationships, and long-term relationships, with some of these companies has borne fruit for us.

In relation to the capacity of our council to handle major projects, I believe council has the capacity. We have two and up until recently three planners — one dedicated planner, one of our general managers and me — to assess major renewable energy projects. However, often this will be supplemented with assistance from government agencies, specifically the EPA, who now have a lot of experience and policy around wind farms and also consulting planners who are brought in from time to time to help us.

As to the benefits and detriments, I think the business within local towns is a great boost to our local economy during the construction phase, especially through accommodation. One of the major stops for all the towers and wind blades was the township of Tantanoola. Tantanoola is probably a town of 300 people, but during that particular time the hotel and the local store and all those sorts of things were actually a hive of activity for those construction crews. It went much wider than that, because the Kimberly Clark pulp mill was expanding — it was doing a half a billion dollar expansion — and a potato processing factory and a wind farm were all going up at the same time, so basically townships within a 25-kilometre radius of Millicent had all their accommodation booked. It was just at a premium, so it was very much a boom for our local economy. But I think the wind farms also gave the community a lot of confidence of business activity happening, and that it was not just a windy place. You can actually make some use of the resource for the benefit of the community.

As we have gone along with the wind farms from Lake Bonney stage 1 to the Canunda wind farm and then Lake Bonney stage 2, Lake Bonney stage 3 and now the planning for Lake George wind farms into the future, there has been a negative impact on our local road infrastructure. And that comes as two. There was one during the construction phase. Your local road infrastructure gets fairly well beaten up, and the first time we said, ‘No, we will be happy to help you out with maintaining it’, which was probably at the end of the day the wrong thing to do. Subsequent to that we ended up with a lot of agreements around who was going to maintain them and do what works at what time, inspections and a whole range of things like that.

Another impact has been from the tourist activity and the amount of people who go out there now. The locals drive at their normal pace; the tourist traffic tends to go even slower, even stopping at some places, jumping fences. I do not know why they do it, but they hug turbines, apparently.

Mrs FYFFE — Perhaps it is a New-Age religion. Mr BRENNAN — I have never been attracted to them in that way, but apparently they do, and they trespass around there. This conflict between local farming traffic now and tourism traffic is a bit of an issue for some of the local landowners, but at the moment we have also got two or three companies exploring wind energy projects going north of our council area, out of our council area into neighbouring council areas as well, with the potential for up to 400 to 500 additional turbines. The interconnector, I think, is approximately a 50-kilometre lead, but apparently the economics actually make that work. We have also got Panax Geothermal, which is the name of the firm currently looking at drilling their first exploratory bore for geothermal power. Biomass also raises its head every now and then, depending on the economics of what might happen there, but all in all we

28 September 2009 Environment and Natural Resources Committee 232 have had no negative experiences in relation to renewable energy projects and the people that we have dealt with over a period of time. As the mayor indicated, from a community perspective, it has been very broadly accepted. Ms LOBATO — Thanks for your presentation. I think you said that in one of the developments there was an objection. I just wonder whether you can talk further on that. Was there really the objection, and on what grounds was it taken? Was it just one, and in the instances of both the developments, surely they were not without some kind of appeal? Can you talk more about those?

Cr BRAES — Yes. With the landowner that I have in mind, I can remember being at a meeting — and our CEO may have been at that meeting — and at that time his complaints were about the potential impact on his stock. It was cattle, and concerns he had. But I am not aware that he lodged a formal objection as such. What is your recollection?

Mr BRENNAN — There was the first Lake Bonney stage 1. I think there were a total of five written representations received. The one the mayor spoke about was more to do with the perception that electromagnetic radiation from his cattle rubbing on turbines would lead to calves aborting et cetera. One was to do with overshadowing, stopping pasture growth. One dealt with noise, but that person I think had a wind turbine on that particular property. They were basically around that. Once again, under our planning system the developers come to the panel, or the council I think it was — the first one — and they make out the development application, setting out what it contains. Then we hear from the representors, and the applicant then responds to the council in relation to those representations. There has never been an appeal, so no appeals at all have proceeded to that stage, to the point that I think with the last two wind farm projects, there were no representations at all.

Ms LOBATO — So there were no environmental concerns?

Mr BRENNAN — No. We are finding more and more that the standard of information provided is at a higher level than when we initially started and that the additional information we have requested has been reduced, which means I think that they are getting better. So you have your fauna reports, native heritage, native title, vegetation surveys, a whole range of things, and that has been outstanding, I think, from the applicant’s point of view. You get montages. When we first began, they said, ‘Can you show us what these things might look like?’, so you got this sort of stick figure drawing, but now you get these full photo montages taken from a range of different areas. From that perspective it has been good.

Mrs FYFFE — I have several questions, but first of all, how are you going to manage the cumulative impacts of the wind farms in your shire if you have so many coming on? Do you think the visual impact is going to be a problem?

Cr BRAES — I suppose logic dictates that the more there, the more likely it is that people might voice their anxieties about the visual impact. I can truthfully say I have only ever had one person express to me a view that they find them a bit visually— —

Mrs FYFFE — But as you get more and more wind farms, you may not notice 50 as much as you will if you have 300 or 400 in one area.

Cr BRAES — They are probably going to be spread out over a longer distance, so they can become more intense. As I understand it, that is very much about the realities of accessing the wind. It is a bit like sailing, apparently, in that where you position them is critical. So where you can have intense amounts in small spaces, the proposals going forward, as I understand it, will take them a fair way up the coastline.

It is not particularly relevant, but a personal insight is that I find them quite majestic. There are a couple of locations where you come over hills and look down on them and where at certain times of the day people are just going up there to take photos. A lot of people have said to me they find them appealing to look at. That has been our reality and, as I said earlier, there just has not been the informal or the formal objections; certainly I cannot recall any petition being generated opposing them.

The other insight I would add is that I suspect what has happened as time has gone by and we have all become more aware of the reality of the challenges of energy production and clean and green, is that over the past

28 September 2009 Environment and Natural Resources Committee 233 10 years or so people have warmed to generally wanting alternate ways of producing energy, whereas we had little objection at the start. Coupled with that, I do not anticipate major issues, although there might be some the further north they go and the closer they are likely to come to perhaps some national park areas, and the closer they are to the coastline, but I suspect most of that, Frank, would be outside our council area.

Mrs FYFFE — In your planning approval process, how are you handling the decommissioning? I understand they have got a life of approximately 25 years. If a wind farm is not as successful as planned, have you covered who and how they are going to be decommissioned or removed?

Mr BRENNAN — That is a very good question. The first one, no, and I think that was because of a lack of experience, a lack of policy and those sorts of things around the life. The subsequent ones talk about the owner of the wind farm decommissioning, which is basically removing the blades, removing the nacelle, removing the tower, which is all bolted together, and you basically end up with the concrete slab foundation. That would be then up to the landowner to decide whether they wanted that particular part removed or not, but my understanding also is that if they did have to renew it, they could actually replace the nacelle, do some— —

Mrs FYFFE — And increase the life again?

Mr BRENNAN — Yes, renewing them. They are actually maintained to a very high standard. People walk up and down them on a daily basis, apparently. I take my hat off to them being able to do that, but we have not really got into the realities, I suppose, of that decommissioning phase at this stage.

The DEPUTY CHAIR — Frank, in your opening statement you talked about the development assessment panels and the appointment of independent persons. I understand the council appoints those panels. Is that what you explained?

Mr BRENNAN — Yes.

The DEPUTY CHAIR — How do you select those independent persons, and do you believe that is a reasonable model in getting people from outside the council? Elected councillors are representatives of the community anyway, so I suppose I am just wondering why that process is set up and how it works.

Mr BRENNAN — I think there has been a lot of experience across the state, specifically with a few recalcitrant councils and how they have dealt with planning applications, the time taken and the hoops and hurdles that people have been made to jump through. The state government in its wisdom thought that a more independent view of planning approval processes was appropriate and necessary, so they came up with the model of development assessment panels. Council is the planning authority, but it has to appoint a panel and then delegate its powers to the panel. The panel will consist of four independent members; one will be the independent presiding member and then there are three councillors or staff members.

The DEPUTY CHAIR — Does that come from a list of panel members provided by government, or is it up to the council to pick them?

Mr BRENNAN — No. Within the act and regulations there are some descriptors about the sort of experience and qualifications that panel members should have — the independent panel members. A number of councils have done it differently. Some have outside experts, if you like, who are panel members — so external from the council area. In our particular case we have, I think, one that has a planning qualification, one is our former mayor and some former councillors. We had an architect at one stage, so I think it actually works. It gives you a broader perspective and experience and more of a planning focus, because this is not about, ‘This is really good for our area’. This is about assessing the development application against the provisions of your development plan, which is supposed to give it the scope. That goes to my comments about divorcing council’s role as an economic developer.

We want our areas to develop, so with the planning authorities we go out and meet these people and talk to them about developments. We will say, ‘Yes, this is great for our area; put an application in’. They put an application in and we say, ‘My God, we have received this application; isn’t this terrific?’, and it is then approved. I think it has actually taken that out of it, or the perception that that could actually happen. So the independent panels I think has been very good.

28 September 2009 Environment and Natural Resources Committee 234 The DEPUTY CHAIR — On the grid connection and connecting renewable projects back to the grid, how have you seen that work, because that is a problem when we start decentralising electricity? If the grid is not there, you have to connect and upgrade the network. How do you see what is happening here and what should be happening in relation to those connections?

Mr BRENNAN — Sometimes the capacity of the grid in certain locations can be overallocated, if you like. We were very lucky in that there was another transmission line that went between the transmission line that feeds the area and gave it some redundancy, some support, so if one site breaks down, you can feed from another direction et cetera. That has allowed the grid in our location to be more robust and therefore to accept more on one site as opposed to the other.

I am not really acutely aware of this, but they talk about the fluctuations in wind energy — no wind, no power — and that can have problems with feeding into the grid on a constant basis. Apparently the technology they use likes that constant feed rather than an interrupted feed, but I think the state agencies probably need to do more work around making the system more robust.

We have communities outside our council area that often have brownouts instead of blackouts, and that causes a lot of angst in those smaller communities. I think they should be overcome. A lot of that can be probably fed by electricity from wind farms. They can now travel a distance of 50 kilometres — which applies to the one proposed north of us — to connect into the grid. Once upon a time they would have baulked at that, but I think the economics around it, especially with the change of the MRETs and targets et cetera, are going to make those things a lot easier to handle.

We are seeing duplication of infrastructure, especially powerlines, and one example is the Lake Bonney wind farm and the Canunda wind farm. One powerline runs down one side of the road verge and the other company’s duplicate transmission line runs down the other side because they could not agree on the terms to provide a single infrastructure and on who would be responsible.

The DEPUTY CHAIR — From a community perspective that is a terrible outcome, I would have thought. That is a role for governments — state and federal — to say, ‘Well, sorry, no, we would like you to go on one backbone’.

Mr BRENNAN — Sharing the phone towers is a classic example. If there is one tower, then share it — share the infrastructure.

Ms LOBATO — As a council that is encouraging alternate energy, what improvements should be made to the approvals process from your perspective?

Mr BRENNAN — A lot of work goes into identifying things from a meteorology point of view. I suppose you could go around and actually have a look at wind-speed maps and those sorts of things, together with the topography. Apparently the topography in our location, with wind coming off the sea across Canunda National Park and across Lake Bonney with very low sand dunes and whatever, coming onto rising hills that have a sharp cut-off at the back pretty much like an aeroplane wing, which give it that sort of velocity and the speed pick-up, has actually been very good.

So if you overlay the two things, you would come up with some areas where more particular zoning should be encouraged. From the point of view of all those people out there doing this work, let us use the information and whatever that they have to actually identify where councils, communities et cetera believe wind farm developments could happen, rather than having developers coming along and deciding. You could probably end up with a very similar system to petroleum exploration licences. You could use all these different areas and end up having a wind energy licensed area that people could bid for, if you want to take that to its nth degree.

Certainly I would recommend using all the information out there to actually identify those areas and, as the mayor indicated too, keeping them closer to bigger population areas. There have been a few in this state and a number in Victoria that you hear about where you get a lot of opposition in those built-up areas too. I probably see them being more decentralised from major population areas, which means that the grid and whatever needs to be more robust.

28 September 2009 Environment and Natural Resources Committee 235 Mrs FYFFE — If I can just stay with the grid just for a little bit. You mentioned someone with 50 kilometres to get onto the grid. Who paid for that?

Mr BRENNAN — That has not happened yet, but it will be the developer.

Mrs FYFFE — The developer will pay? They are not expecting subsidies from the state government?

Mr BRENNAN — No. Not at all.

Mrs FYFFE — Is it a condition in the planning permits that they prove that they have access to the grid and that their power is going to be taken up? Can you control that, or is it not covered by what you do?

Mr BRENNAN — No, I do not think we can control that or expect that up front, but my understanding is that basically you would not get to lodge an application without first having done a lot of work with the electricity distributor about where they can hook into the grid. My understanding is that they get permits et cetera that are allocated over a certain period of time. If you want to connect to the grid here today, and then someone came in after you, then you would still get first preference. That is my understanding.

That is part of the work external to the planning issues. Connection to the grid is not a planning issue. It is more about the infrastructure, where it is sited, visual impacts, impacts on the environment et cetera, as opposed to whether they have approval to hook into someone else’s infrastructure.

Mrs FYFFE — So that planning permit would not hold a lot of value for them to want to sell it to another company unless they had that?

Mr BRENNAN — Yes, absolutely.

Mrs FYFFE — Because you hear of the speculative investment in time and money getting the planning permits and then onselling them.

Mr BRENNAN — Onselling.

Mrs FYFFE — Could we just talk about the fauna reports that are required in the planning process? These are commissioned by the applicant with various consultants and so on to do it. Have you come across much criticism of the way these reports are compiled and comments that perhaps they are not as detailed or informative as they could be? Referring back, we heard evidence about a report that was filed that said they had seen no evidence of this particular bird and yet locals were saying, ‘Yes, it is there, and I have counted so many’.

Mr BRENNAN — No. I suppose part of the referral process to other government agencies is not about saying, ‘You have got an application. Do you want to know about it?’, but rather it is about saying, ‘Here is a full copy of the application, the reports et cetera’. Other than just sending it to the EPA, we also send it to the Department for Environment and Heritage. They actually review the reports, and they can request further information or supplementary information from the applicant, as opposed to the council. The agencies can do that in their own right as well.

The detail that actually goes into these flora, fauna and native vegetation reports is quite substantial. In our area the orange-bellied parrot — —

Mrs FYFFE — Yes, we know about that.

Mr BRENNAN — It has been one of the dominant things, but that has all been covered off, and our local field naturalists society et cetera have not had any problems with the applications and what has been put forward over a period of time.

It is similar with other applications. We have part of the red-tailed black cockatoo’s feeding areas — not the nesting areas — and that has an impact. Once again, for all the applications we have had in relation to developments within those areas the reports have been quite substantial and have been received well by the agencies.

28 September 2009 Environment and Natural Resources Committee 236 The DEPUTY CHAIR — You touched on bioenergy development, or the lack of it in the area. As I understand it that area of the state is reasonably well endowed with a lot of plantation-type investment, so theoretically you would have a fair amount of wood waste, which has the potential to be used in the generation of bioenergy. Can you give us an understanding of why the investment has not been made in that type of renewable energy, considering that in most of Europe it is one of the more dominant forms of renewable energy that is being developed?

Mr BRENNAN — I think it is because there is quite a substantial composting operation at Wandilo just north of Mount Gambier, Van Schaik’s Bio Gro. They got in early when it was a waste resource as opposed to a resource that is of some value for creating energy. They have long-term contracts and lock a lot of it up. Without expansion of the timber plantation estate it would have to grow substantially to allow for another development to happen using the biomass, as opposed to its current usage, and Van Shaik with its composting operation.

I would say that is probably the biggest impediment at the moment, There have certainly been two companies that have explored biomass opportunities but never got to an application stage.

Ms LOBATO — I was wondering whether you could talk more about geothermal projects. Is there anything happening currently on that front?

Mr BRENNAN — There is a company, Panax Geothermal that bought out another company that was doing some early exploration around our area. We have an area from Penola through to Mount Burr and Beachport that has been identified, and every area in between there. They have done a lot of — I do not know how to explain it — I think magnetic, and whatever, exploration over the area to identify where the hot rocks are or where the potential is. They were just awarded a $7 million federal government grant — —

Cr BRAES — A federal grant.

Mr BRENNAN — It is to assist them, to allow them to drill their first pilot hole that would be the first one in the area, although when you go back and actually have a look at a lot of our artesian water and a lot of bores into the second aquifer, throughout our area a lot of them come up hot, so you would have to think that the volcanic history of the area would lend itself to that. They are very confident that this bore will have good results, and all the information they are publishing in advance of drilling the hole is very up-beat about the potential opportunities arising from that.

Once again they have chosen a location very close to the grid as opposed to something that is further away. There is a relationship between the grid and where you site a lot of the geothermal holes especially. You can drill a hole that goes way over there somewhere and gets the water to come up, so you put your plant closer to the grid rather than just drill a vertical hole straight down.

Mrs FYFFE — And it has the attraction of being more consistent with the production of the power, which then could cause problems if the group is overallocated, and you have got all these ‘sleeper licences’ for wind farms.

Mr BRENNAN — Yes, absolutely. From that point of view, I think it is all in the forward planning and what comes first. Do you need access to the grid first, and then build your application around it, which I thought would have been, from a business perspective, the right thing to do?

Mrs FYFFE — Yes, you certainly would think so.

Mr BRENNAN — Yes.

Mrs FYFFE — After you have granted all the permits that you can, and all the agencies are happy and the whole thing is going, who does the monitoring and enforcement? Does that fall back on the council’s shoulders again?

Mr BRENNAN — Yes.

Mrs FYFFE — All of it?

28 September 2009 Environment and Natural Resources Committee 237 Mr BRENNAN — Yes. Probably, other than noise, council is not the responsible authority, although you might hear from some agencies today that say we might be. Council is not responsible for monitoring or attending to noise-based complaints. That is the environment protection agency’s responsibility. Everything else in relation to vegetation clearance, compliance, the conditions of approval, access roadways et cetera, all fall within council.

The other aspect, which is outside the planning approval process, is that when they want to run infrastructure across or underneath roads, there are other permits required under the South Australian Local Government Act to facilitate their running underground lines across roads et cetera. It is all monitored by council.

Mrs FYFFE — What financial benefit is council getting from these wind farms when you have got this ongoing cost that you have to cover?

Mr BRENNAN — I suppose there is no direct financial return, other than there is an increase in the property-based valuation, so your rating base can increase. Councils have long-term financial plans. They have policies to maintain rates within the CPI, plus growth factors, which is real growth, as in from development as opposed to just a natural increase in property valuations. We try to isolate that out, so you can actually build your rate base to increase your revenues.

Mrs FYFFE — In our notes we see that WestWind Energy made a submission to the inquiry that said that Victoria’s municipal charges for wind farms is $40 000 a flag fall per facility, with an additional $900 per megawatt installed. I do not know if that is correct, or if any one of my colleagues know.

Mr BRENNAN — Under our legislation — and you will probably have people from the Development Assessment Commission addressing you today — our paying fees are set by legislation, so that sounds like a really good system if we could promote it.

Mrs FYFFE — That is why I thought I would raise it in front of you, because these ongoing costs are going to be considerable as time goes by.

Mr BRENNAN — We have a lodgement fee and a fee depending upon the value that you put on the wind farm, so the total capital value; but once again, what is seen as fit-out and what is not? If you can pull the blades off today, which they can; if you can dismount the nacelle, which you can; if you can dismount the tower and take it away, then it is not capitalised from a valuation perspective, so it is all seen as probably fit-out. Basically you are left with the concrete foundation.

Mrs FYFFE — And a road going in which you have had to contribute to.

Mr BRENNAN — Yes, there is a cost.

Mrs FYFFE — Councils always pay for everything.

Mr BRENNAN — But by the same token, once you get over $100 000, it is about 0.01 per cent of the nominated value of the property. Some of the fees can probably be substantial from that perspective, but this is not something that we dream up; it is just what the statutory fees are under the legislation.

The DEPUTY CHAIR — To put some of this into perspective, what is the size of your local government area ratio to rate base, and stuff like that which is used to look at the impact of the cost on your planning department or the council?

Mrs FYFFE — How many kilometres?

Mr BRENNAN — It is 400 000 square kilometres, going from the Victorian border to the coast, and it consists of 13 townships and 12 500 people. There is probably 2600 kilometres of road, which I think puts us in the top 10 councils in the state but probably not in the top 10 by area. We are very heavily subdivided. Because of the high productivity of our area, we seem to have small allotment sizes and just roads everywhere. It is a challenge. We have an operating budget of probably $17 million to $18 million.

Mrs FYFFE — Do you have a lot of unrateable land such as state forest and so on?

28 September 2009 Environment and Natural Resources Committee 238 Mr BRENNAN — No, we are actually very lucky in relation to our state forests. Under the South Australian Forestry Corporation Act they actually pay an amount on their commercial forestry plantation area as opposed to their native vegetation areas, commensurate with the rates that they would pay, on the proviso that we have to spend half of that on roads that would have a benefit to the forestry industry. In that respect, I think we are quite well off, but we do have a lot of national parks, such as Canunda National Park et cetera.

The DEPUTY CHAIR — Can you provide the committee with time frames for wind farm developments in the council’s area? Where are the delays. You made a comment that the time stops; there is a three-month approval, I think?

Mr BRENNAN — Yes.

The DEPUTY CHAIR — Are you saying there is a stop if you seek additional information? What are your recommendations about overcoming some of those delays?

Mr BRENNAN — There would be no delays if every application came in with all the information that we wanted in it.

The DEPUTY CHAIR — That delay is never used to buy council time?

Mr BRENNAN — No, it has to be a legitimate request for information. My comment was that early on it did take a lot longer because we were in a learning phase and needed more information, so that delay time was probably bigger, but now because the developers are more aware and are doing a lot more of them, you need to provide all of this information. The information that we are requesting is actually dropping off significantly. If all the information was there from day one; it would take 3 months maximum; you have to make that. But we are not the only ones who can stop the clock. The government agencies can also stop the clock if they request further information, as well.

The DEPUTY CHAIR — From the time the developer comes in and says, ‘Here is a project’, what would you say is the average time taken for approval? You say it is three months, but for those couple that have been approved, what was the time line from presentation to approval?

Mr BRENNAN — I would say with the first one it was probably closer to four and a half months — and I have not got the exact figures. With the last one it was three months, so it was on time because of all the information. You are supposed to consult with us a lot up-front too — for example, our planners need a lot of information up-front, but they are faced with questions about the information they want, and in what form they want it, so when it hits the desk the three months is usually where we end up.

Ms LOBATO — I would like some more information as to why there is the time delay? The approval for the first two was granted and then the actually commissioning took another five years, or something like that — or another four years. What is the main reason for that? I know we touched on it before, but can you expand on that?

Mr BRENNAN — It is more around them achieving financial close of the project. Stage 1 of Lake Bonney was about $180 million — $168 million or thereabouts. There is the time taken to get the development approval in place and then they have to kick off on a whole number of other things. They have to go out to source the money, call for tenders and award the tenders. Some of the wind blades, I think, with the first stage were actually imported rather than built in Australia et cetera.

All of those sorts of things add up to, ‘Yes, we have got financial close, we have got all the money, we have awarded everything and we will start on the ground’. That is probably the business development phase, I suppose, as opposed to anything to do with the planning approvals.

Mrs FYFFE — Have you had to put many extra planners on to handle this, with it being so complicated? Have you had to increase your staff?

Mr BRENNAN — No.

Mrs FYFFE — You have been able to do it within what exists?

28 September 2009 Environment and Natural Resources Committee 239 Mr BRENNAN — Yes.

Mrs FYFFE — The turbines themselves are changing. As we saw when we were travelling around Victoria, they seem to be becoming taller, the blades are bigger, the lights flicker and you have got the noise. The whoosh seems louder; everything is changing. You have developed your system from the first one, but the technology is changing so much that they are becoming ginormous.

Mr BRENNAN — I suppose from our perspective, and from a planning point of view, we are happy as long as they can continue to meet the guidelines in relation to noise. Flicker has probably been one of those things that sort of comes with the first few wind farms that have been put up. It was not seen as an issue until they were up and operating, as you would know.

Mrs FYFFE — People would not know, would they?

Mr BRENNAN — They do not know about it. But I think all the applications we are now getting come with the right information and certainly meet all of the EPA guidelines in relation to noise, flicker and those sorts of things.

Mrs FYFFE — What are the guidelines for noise? Do you know that off the top of your head? How do they relate? Is it on an industrial level?

Mr BRENNAN — No, there is more than I can tell you.

Mrs FYFFE — Yes. That is okay.

The DEPUTY CHAIR — As the final question, we have a number of issues in Victoria with cultural heritage management. It has been an issue that many of the developers have come up with. Can you explain the process of managing cultural heritage in these types of developments in South Australia and how that is dealt with through the panel process?

Mr BRENNAN — They actually undertake a native title report. In relation to our ranges, the was actually populated by the Boandik people. But there is still quite a number of groups around that can deal with that. The legislation places the onus on the developer at any time, so they can actually go and do that, make a report and come up with a tick, if you like, that they are not going to impact on the native cultural heritage. However, during the construction phase the onus is once again on the developer. If they discover anything of a native heritage significance, then they stop work and call in the appropriate authorities. To date it has not happened and has not occurred. Once again, they are all happening in a very similar location. There are no cultural heritage sites which have been identified on that particular range. It is probably further inland than part of the coastal area. The majority of the significant heritage would be located within the Canunda National Park and the Beachport conservation reserve etcetera where you have got your middens and other significant sites for wells.

The DEPUTY CHAIR — So when work is being done at these sites, do they have archaeologists or monitors assessing any disturbance?

Mr BRENNAN — No, they have not to date.

The DEPUTY CHAIR — Thank you very much Mark and Frank. It was really good evidence. Thank you for coming and providing that information.

Witnesses withdrew.

28 September 2009 Environment and Natural Resources Committee 240