Chapter 1Introduction
Referral of the inquiry
1.1On 27 September 2022, the National Energy Transition Authority Bill 2022 (the bill) was introduced into the Senate and read a first time.
1.2On 28 September 2022, the Senate referred the bill to the Senate Economics Legislation Committee (the committee) for inquiry and report by 14 March 2023.
1.3On 22 December 2022, the committee tabled a progress report seeking an extension of the reporting date to 24 March 2023.
Purpose of the bill
1.4The bill seeks to create the National Transition Energy Authority as a new independent statutory authority with powers and functions to guide Australia’s energy transition and support affected workers and their communities.
Background
1.5The shift in electricity generation in Australia from coal-fired power to firmed renewables and storage has well and truly begun. Closure of more than half of the existing coal fleet is planned by 2030, and the Australian Labor Party aims to increase renewable production to 82 per cent of generation from the National Electricity Market (NEM) by the same year under its Powering Australia Plan. Australia now also has a legislated commitment of net zero by 2050, with the commencement of the Climate Change Act 2022 on 13 September 2022.
1.6In June 2022, the Australian Energy Market Operator (AEMO) released its 2022 Integrated System Plan (ISP), a 30-year roadmap for investment in the NEM to support Australia’s complex and rapid energy transformation. In launching the 2022 ISP, Chief Executive Officer (CEO) of the AEMO, Mr Daniel Westerman, stated:
The 2022 ISP informs Australia’s energy transformation, based on an ‘optimal development path’ of essential transmission investments that will efficiently enable low-cost, firmed renewable energy to replace exiting coal generation.
…
The ISP will help industry participants, investors, governments, and communities plan for the decarbonisation of the power system to deliver low-cost, firmed renewable electricity with reliability and security.
1.7The Australian Greens’ 2022 election policy, Powering Past Coal and Gas, outlined the party’s plan for phasing out coal and gas while looking after coal communities, including through the establishment of a statutory transition authority.
1.8The National Energy Transition Authority Bill 2022 seeks to implement the Australian Greens’ proposal for a statutory transition authority. Commenting on the bill just prior to the 2022 Budget, Senator Penny Allman-Payne, the Australian Greens’ spokesperson for Industry, Transition and Regional Development, stated:
We need a national body to help coordinate and fund this potentially national-building transformation. The Greens’ National Energy Transition Authority would work with communities, workers, unions, energy companies and governments at all levels to plan the pipeline of clean energy projects and ensure a bright future for former coal workers and regional communities.
1.9Notably, many submitters and witnesses on this bill referred to the work of the Australian Council of Trade Unions in its research and policy recommendations on energy transition over recent years, mainly the policy discussion paper ‘Sharing the challenges and opportunities of a clean energy economy: Policy discussion paper A Just Transition for coal-fired electricity sector workers and communities’.
Provisions of the bill
1.10The bill contains 67 clauses set out under seven parts, as summarised below.
Part 1—Preliminary
1.11Part 1 of the bill (Clauses 1 to 7) comprises preliminary clauses including provisions pertaining to the bill’s commencement (see below) and relevant definitions.
1.12Clause 3 specifically outlines the object of the bill as follows:
The objects of this Act are:
(a)to create a new statutory authority, the National Energy Transition Authority, to ensure that communities in affected areas are supported during the transition to a new national energy system; and
(b)to enable this new statutory authority to conduct forecasting and coordinate a national approach to workforce planning, energy system change and resource exports, as they relate to transitioning to clean energy.
Part 2—National Energy Transition Authority
1.13Part 2 of the bill (Clauses 8 to 18) sets out the establishment, functions, and powers of the National Energy Transition Authority.
1.14Clause 9 outlines the National Energy Transition Authority’s general functions. In addition to its law reform and advice functions (see below), these general functions include:
supporting communities and workers affected by the closure of coal-fired power stations to adapt through helping to attract new investment in job-creating industries and social infrastructure, and ensuring ongoing equivalent employment or the provision of social services in affected areas;
enabling workers to shift between employers by working with employers in relevant industries to encourage workforce pooling; and
assisting workers nearing retirement age to transition to a voluntary, financially secure retirement through planning with workers and agencies.
1.15Clause 10 provides that the National Energy Transition Authority’s law reform functions include:
reviewing and proposing changes to Commonwealth, State and Territory laws relating to mining, resources, industry policy, industrial relations, electricity generation and related matters;
consulting with Commonwealth, State and Territory governments regarding proposed changes;
recommending Commonwealth law changes to the Minister, with accompanying draft legislation; and
publishing the results of reviews and recommended law changes.
1.16Clause 11 provides that the National Energy Transition Authority’s advice function is to provide and publish advice to the Minister and Commonwealth, State and local governments regarding:
sources of renewable energy that should be used at particular locations;
particular electricity generation projects;
models for guaranteeing returns on investment on electricity generation projects;
workforce modelling and planning for energy and related industries suited to a zero emissions economy, with consideration of existing workforce trends;
how to work with communities and workers affected by the closure of fossil fuel mines or coal-fired power stations to ensure equivalent employment opportunities and social services are maintained, including by attracting new industries; and
how, and to what extent, emerging renewable energy and related industries can replace existing exports of coal and gas.
1.17Clause 13 sets out that the Minister may give written directions to the National Energy Transition Authority about the performance of its functions; however, it specifies that such directions must be of a general nature only.
1.18Clause 14 provides that a law of a State or Territory may confer powers or functions on the National Energy Transition Authority; however, such conferral of powers or functions must not restrict any duties by contravening constitutional doctrines or exceeding the legislative powers of the Commonwealth. Further, a duty of function cannot be performed under a State or Territory law without the written approval of the Minister.
1.19Clause 17 sets out the National Energy Transition Authority’s powers. The bill states that ‘the National Energy Transition Authority has the power to do all things necessary or convenient to be done for or in connection with the performance of its functions’. The bill further outlines that the National Energy Transition Authority’s powers may be exercised within or outside Australia and include, but are not limited to, the power to:
enter into contracts;
erect buildings;
occupy, use, and control any land or building owned or held under lease by the Commonwealth and made available for its purposes;
acquire, hold, and dispose of real or personal property;
provide financial assistance;
provide guarantees;
raise money, by borrowing or otherwise; and
provide or administer services, facilities, programs, or equipment.
Part 3—Board of the National Energy Transition Authority
1.20Part 3 of the bill (Clauses 19 to 37) sets out details relating to the establishment and functions of the Board of the National Energy Transition Authority (the Board), as well as the Board’s membership (appointments, terms, remuneration, resignations and terminations) and meetings.
1.21Clause 20 outlines the functions of the Board as follows:
(a)to decide strategies and policies to be followed by the National Energy Transition Authority; and
(b)to ensure the proper, efficient and effective performance of the National Energy Transition Authority’s functions; and
(c)any other functions conferred on the Board by this Act.
1.22Clauses 21 to 24 provide that the Board would comprise of a Chair and at least four, but no more than 6, other members, and that Board members will be appointed by the Minister for a specified period of no more than five years.
Part 4—Chief Executive Officer, staff and consultants and committees
1.23Part 4 of the bill (Clauses 38 to 52) provides for the establishment, functions, and appointment of the CEO of the National Energy Transition Authority. Part 4 of the bill also sets out the basis under which staff and consultants could be engaged and provides for the establishment of committees to advise or assist the Board.
Part 5—Finance
1.24Part 5 of the bill (Clauses 53 to 60) outlines financial matters pertaining to the National Energy Transition Authority.
1.25Clause 53 provides that Parliament may appropriate money for the purposes of the National Energy Transition Authority and that the Finance Minister may give directions about the amounts and times at which money is to be paid to the National Energy Transition Authority.
Part 6—Strategic plans and annual operational plans
1.26Part 6 of the bill (Clauses 61 to 63) sets out details related to the National Energy Transition Authority’s strategic and annual operational plans.
1.27Clause 61 provides than planning periods for the Board would not be more than five years and that the Board would inform the Minister of declarations made pertaining to planning periods.
1.28Clause 62 outlines that the Board would formulate a strategic plan prior to the commencement of each planning period. The strategic plan, which would be submitted to the Minister, would set out:
the broad objectives of the National Energy Transition Authority during the relevant planning period;
a broad outline of the polices and strategies to be pursued to achieve those objectives; and
the policies and strategies to be pursued to achieve the energy objectives and functions provided by Clause 9 (see paragraph 1.13).
1.29Clause 63 sets out that the CEO would formulate an operational plan prior to the commencement of each financial year. The operational plan would be provided to the Board and would comprise details pertaining to the National Energy Transition Authority’s proposed strategies, activities, and resources during the financial year to give effect to the relevant strategic plan.
Part 7—Miscellaneous
1.30Part 7 of the bill (Clauses 64 to 67) contains miscellaneous clauses pertaining to the delegations of powers and functions to members of the Board, the CEO and senior staff, as well as the making of rules by legislative instrument.
1.31Clause 67 specifies that the Minister may, by legislative instrument, prescribe matters making rules. Rules must be required or permitted under the Act and necessary or convenient for giving effect to the Act. Clause 67 also sets out what rules may not be prescribed; including, where they would create an offence or civil penalty, provide powers of arrest, detention, entry, search, or seizure, or impose a tax.
Commencement
1.32The bill would commence on the latter of the day six months after the Act receives the Royal Assent and the day the Consolidated Revenue Fund is appropriated to fund the National Transition Energy Authority. Clause 2 of the bill stipulates that the Act would not commence if funding for the National Transition Energy Authority is not appropriated.
Consultation
1.33The Explanatory Memorandum (EM) does not reference any consultation activities in relation to the bill.
Financial impact
1.34The EM does not reference any financial impact of the bill.
Legislative scrutiny
1.35In its Scrutiny Digest 6 of 2022, the Senate Standing Committee for the Scrutiny of Bills (Scrutiny Committee) noted that certain clauses in the bill raise potential scrutiny concerns under Senate Standing Order 24.
1.36Specifically, the Scrutiny Committee commented that Clause 55 of the bill—pertaining to borrowing from the Commonwealth—may raise scrutiny concerns in relation to broad discretionary powers and instruments not subject to an appropriate level of parliamentary oversight. The Scrutiny Committee also commented that Clause 62 of the bill—pertaining to the submission of strategic plans to the Minister—may raise scrutiny concerns in relation to the tabling of documents in Parliament.
1.37The Scrutiny Committee noted that should the bill proceed to further stages of debate, it may request further information from the bill proponent.
Human rights implications
1.38The Statement of Compatibility with Human Rights in the EM states that the bill is compatible with the human rights and freedoms recognised in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
1.39The Parliamentary Joint Committee on Human Rights examined the bill but made no comment regarding the bill and whether it raises any human rights concerns.
Regulatory impact
1.40The EM does not reference any regulatory impact of the bill.
Conduct of the inquiry
1.41The committee advertised the inquiry on its website and wrote to relevant stakeholders and interested parties inviting written submissions by 25 November 2022.
1.42The committee received 34 submissions, as well as additional information and answers to questions on notice, which are listed at Appendix 1.
1.43The committee held one public hearing for the inquiry in Canberra on 28 February 2023. The names of witnesses who appeared at the hearing can be found at Appendix 2.
Acknowledgements
1.44The committee thanks all individuals and organisations who assisted with the inquiry, especially those who made written submissions and participated in the public hearing.