Posted on July 27, 2026 by Dimitrious Havadjia and Megan Hawley

Changes to Renewable Energy Planning Agreements Likely Coming in 2026

Voluntary planning agreements are frequently used by planning authorities, such as local councils, as the legal mechanism by which proponents of renewable energy projects share the benefits of those projects with the local community. Planning agreements for renewable energy projects (‘Energy VPAs‘) often require proponents to make monetary contributions to local councils to fund community infrastructure throughout the life of the project.

The Energy Legislation Amendment (Prioritising Renewable Energy) Bill 2026 (‘Bill‘) currently before the NSW Parliament will, if passed, amend the Environmental Planning and Assessment Act 1979 (‘EPA Act‘) to give the Minister for Planning and Public Spaces greater direct control over the terms of Energy VPAs.

The Bill follows the publishing of the Benefit-Sharing Guideline by the Department of Planning, Housing, and Infrastructure in November 2024 (‘Guideline‘), which sets out key principles regarding Energy VPAs, including contribution rates. We previously wrote about the Guideline here: VPAs & Benefit-Sharing for Renewable Energy Projects in NSW.

The Proposed Amendments

The Bill proposes two key amendments to the EPA Act that will affect Energy VPAs.

The first is a change to section 7.4(1) of the EPA Act to enable contributions under an Energy VPA (to be defined by the regulations) to be directed to purposes other than a public purpose, with those purposes to be prescribed in the regulations.

The second is a change to replace section 7.9(b1) of the EPA Act with two new provisions that will give the Minister the power to direct planning authorities as to:

(b1) the amount of land to be dedicated free of cost, a monetary contribution to be made or other material public benefit to be provided by the developer under a planning agreement, or
(b2) the method of determining the extent of the provision of the land to be dedicated free of cost, a monetary contribution to be made or other material public benefit to be provided by the developer under a planning agreement. 

Impacts

The NSW Government states that these reforms will ‘support the effective and consistent implementation of the NSW Benefit-Sharing Guideline, ensuring councils and communities hosting projects receive associated benefits.’

In the absence of any supporting regulation at this stage, it remains unclear what the Minister has in mind in terms of what Energy VPA contributions might be directed to that cannot fall within the current definition of ‘public purpose’, which is already inclusively and broadly defined in section 7.4(2) of the EPA Act. The Second Reading speech refers to ‘community purposes’ but does not elaborate on what is contemplated by that term.

With respect to the changes to section 7.9, the second reading speech states this change is to ‘support consistent benefit-sharing arrangements across the State.’

We expect that this will result in the Minister directing (either generally or on a case-by-case basis), that contributions made under Energy VPAs must be in accordance with the Guideline, which will give the Guideline binding legal force.

What remains to be seen is whether the direction will set the contribution rates in the Guideline as a maximum or minimum amount. If the former, the Bill may well result in local authorities having less autonomy to independently negotiate Energy VPAs that deliver benefits that respond to the particular issues faced by those communities.

We will provide a further update if and when the Bill becomes law.

The Bill can be accessed here: Energy Legislation Amendment (Prioritising Renewable Energy) Bill 2026.

If you have any questions about this article, please contact Dimitrious Havadjia or Megan Hawley.