EXCLUSIVE: Ashurst & Allens provide a legal review of 2022

At the end of the year, the Energy News editorial team approached eminent partners and senior lawyers from Australia's leading legal firms to provide their review of the year that was from a legal perspective. The brief was broad - asking them to surmise the biggest and most profound developments - legally - from land access to litigation affecting the oil and gas and energy sectors.

EXCLUSIVE: Ashurst & Allens provide a legal review of 2022

The two final firms chosen were Allens (associated with Linklaters) and Ashurst. One is a member of the ‘Magic Circle' and both are of the ‘Big Six' firms in Australia.

Allens Partner and Energy Sector Lead Kate Axup surmises the greatest moments of 2022 

Disruption and the transition - Kate Axup


The year in energy has been defined by disruption associated with the market's efforts to adapt to and plan for the transition away from coal to renewables. There were a number of moments throughout 2022 that disrupted the energy market itself and our biggest energy players, and in doing so brought the transition (and all of its challenges) into focus. These moments created a shared sense of urgency that will be critical to transitioning Australia's energy system. Looking back on the year, there are six events that really stand out.

Central-West Orana renewable energy zone (CWO REZ) shortlisted bidders announced

4 May: The CWO REZ will be delivered under the NSW Government's Electricity Infrastructure Investment Roadmap. It is the first of a series of renewable energy zones to be delivered under this new statutory framework, which seeks to involve private capital and expertise in the construction of new transmission infrastructure to connect new renewable generation and storage projects to the network.

AGL demerger withdrawn

30 May: AGL Energy announced that it was abandoning its proposal to demerge AGL Energy into AGL Australia and Accel Energy. This followed a prolonged campaign by Mike Cannon-Brookes, and Cannon-Brookes' Grok Ventures securing an 11% interest in AGL Energy. This then led to the resignation of multiple directors and the chief executive, and the announcement by AGL Energy of a review of its strategic direction.

National Energy Market (NEM) suspension

15 June: The Australian Energy Market Operator (AEMO) suspended the spot market in all regions of the NEM on the basis that it had become impossible to continue to operate the spot market while ensuring a secure and reliable supply of electricity to customers. This was unprecedented in the history of the NEM and was prompted by a combination of factors including the war in Ukraine (causing high gas prices) and coal-fired power stations being offline for maintenance. During the period of suspension, AEMO applied a pre-determined pricing schedule for each region of the NEM.

Commonwealth emissions targets legislated

8 September: The Albanese Government's Climate Change Bill passed the Senate, enshrining two important commitments in legislation: an emissions reduction target of 43% below 2005 levels by 2030 (being an increase of 15% on the previous target) and achieving net zero emissions by 2050.

Origin Energy takeover

10 November: Origin Energy announced that it had received an $18.9 billion takeover offer from a consortium comprised of Brookfield Asset Management and EIG, with the bidders planning to divide the company's energy markets and integrated gas businesses between them.

Commonwealth gas and coal price intervention

9 December: The Prime Minister announced that he had reached agreement with the states to temporarily cap the wholesale price of gas and coal for a 12 month period, and will introduce an ongoing code of conduct which will require gas producers to comply with a 'reasonable pricing' provision which is intended to ensure that gas prices reflect the cost of domestic gas production (allowing for a reasonable rate of return).

The suspension of the wholesale market in June and the Commonwealth Government's recent gas pricing policy announcement are of particular significance. Both events are unprecedented in the history of Australia's national energy market and bring together many strands of the challenges faced by Australia in the energy transition. We need to do things differently, and balance the many stakeholders and drivers which underpin this very complex system.

During the year, we have witnessed the roles played by all participants in Australia's energy system - ranging from the Commonwealth and State governments, regulatory bodies and the private sector. We have State governments making announcements and commitments relating to new energy generation and storage infrastructure projects, such as the New South Government's progress under its Electricity Infrastructure Roadmap, with the Waratah Super Battery (the first project to be delivered under that framework) getting underway. We have immense levels of private capital interest in energy assets, as evidenced by the bidding field for the CWP Renewables portfolio where Andrew Forrest's Squadron Energy was the successful bidder at a price of around $4bn.

The change in government at a federal level has also been noteworthy. There is more support for the transition and more emphasis placed on reducing emissions. Reforming the safeguard mechanism, boosting the proportion of renewable energy in the grid to 82 per cent over the next ten years and making a binding commitment to reducing emissions are all welcome policy changes. The Commonwealth Government's challenge will be to continue this momentum while trying to deliver on promises to reduce energy prices, as there is no quick or easy fix.

There are lots of details to work through and an enormous amount of work to be done over the coming 10-15 years, but 2022 has certainly been the year that focused the country's attention on and rallied our resources around Australia's energy transition.


Ashurst Partner Cassandra Wee and Associate Joshua Hetzel expand on themes:

The Australian energy market in 2022 has looked more promising than in some time. Global funds, developers and tech suppliers have raced to enter the Australian energy market, which suggests a positive outlook for 2023.  

These opportunities are not without their challenges.  Businesses need to manage the increasing uncertainty caused by economic and energy instability, increasing government intervention and changing consumer expectations.

An active role by Government

In 2022 we saw that governments are no longer just regulating markets, but also are prepared to play an active role in supporting business. Governments are leading developments to coordinate investment and bring down energy costs for consumers and business. In 2022, the NSW Government led procurement processes for new transmission infrastructure in the Central-West Orana Renewable Energy Zone, the development of the Waratah Super Battery and new financial products to support businesses manage energy price risk.

However, there is still not enough transmission infrastructure and battery storage to support the high penetration of variable renewable energy in the grid. The Australian Government's schemes, such as 'Rewiring the Nation' and the 'Capacity Investment Scheme', aim to help close this gap in 2023.  The intent is to fast-track Renewable Energy Zones, fund transmission infrastructure and underwrite battery storage.  Significant labour and skills will be required to implement these projects.

Transformation over transition

Large gentailers are undergoing the complex task of decarbonising while carefully managing the risk of stranded assets and the early retirement of coal-fired generators. These transition strategies are often developed through the lens of a future circular economy at valuable sites. However, transition plans and disclosures are not without their critics.  We saw businesses subject to greater scrutiny, through shareholder activism, claims of greenwashing and climate change litigation.  This diverted resources and expertise away from the wider decarbonisation goals at hand. 

An energy market suspension also occurred in 2022, which signalled underlying issues with the market.  This created issues for all participants - particularly smaller retailers, prompting efforts to find better organised outcomes for the transition.

Market entry mandates

Large international companies are rapidly entering the Australian market, some of which do not have existing experience in the renewable energy sector or Australia.  New players have been navigating foreign investment regimes and corporate structuring to acquire specific renewable projects or renewable asset platforms.

This year we saw private funds and capital leading new investment. Large reserves of private capital have been unlocked to support the energy transition and the development of large-scale projects. Some examples include Brookfield's proposed acquisition of Origin and proposal to invest an additional $20 billion to fund its clean energy transition and BlackRock's acquisition of Akaysha Energy and support to build the Waratah Super Battery.  

There also remains a wave of interest in Corporate PPAs as corporates are becoming savvier in their renewable energy procurement processes. 


Technologies such as battery storage, offshore wind and hydrogen, are becoming more prevalent in Australia and complementing rapidly maturing markets such as solar. Many challenges remain and are similar across these technologies. For example, offshore wind and hydrogen need appropriate regulatory frameworks and significant economic investment.

For industries that are hard to decarbonise, such as transport, mining, oil and gas: companies are looking to electrify fleets of vehicles or use hydrogen-fuelled solutions for heavy vehicles.  Interest has also risen for resource recovery measures to divert waste from landfill, and carbon offset procurement and project development to reduce the carbon footprint.

Government intervention

The conflict in Ukraine made the global energy market in 2022 more volatile. Energy security and affordability has become an increasingly important topic. Australian households will receive an energy rebate through a reduction in power bills, with up to $1.5 billion from the Australian Government.  The Australian Government has also proposed caps on the domestic gas price and some states' coal prices. The new mechanisms propose to cap the domestic gas price at AUD$12 a gigajoule and limit the domestic coal price used for electricity generation in NSW and Queensland to AUD$125 per tonne.  As part of the package, the Australian Government also plans to introduce a mandatory "gas market code" which can require participants in the East Coast gas market to offer "reasonable pricing", amongst other possible provisions on EOIs and referring disputes to mediation or arbitration.

It is becoming increasingly recognised that the energy transition is not just about energy. The impacts are felt across all aspects of business, government and supply chains. We expect that 2023 will bring a diverse range of stakeholders and market segments together to drive projects and regulations forward.  Any recessionary headwinds are unlikely to slow the direction and pace of the energy transition - provided that skills and resourcing can grow to meet demand.  

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.

A growing series of reports, each focused on a key discussion point for the energy sector, brought to you by the Energy News Bulletin Intelligence team.


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