Recent cases across Australia have addressed different issues related to the energy sector. These include feasibility licences for offshore wind projects in Victoria, Environment Management Plans for exploratory gas wells in the Northern Territory and short notice re-bidding strategies in the Queensland electricity market.

Seadragon Offshore Wind Pty Ltd (Seadragon) v Minister for Climate Change and Energy [2024] FCA 1290

In this case, Seadragon applied for a feasibility licence for an offshore wind project in the Gippsland Declared Zone. The Minister for Climate Change and Energy refused the application citing Section 33(1) of the Offshore Electricity Infrastructure Act 2021 (Cth), arguing that it did not allow partial grants when application areas overlapped with more meritorious proposals.

Seadragon challenged this interpretation and Justice Perram determined that the Minister did have the power to grant a feasibility licence for an offshore wind project over a smaller area than initially applied for. The Court noted a regulatory gap in handling overlapping applications of unequal merit and suggested the Minister should apply their powers practically. It ordered the Minister to reconsider Seadragon’s application and cover the company’s legal costs.

Applicants who were previously unsuccessful could consider retesting their cases based on this ruling. The Government may also consider making regulatory changes to address the issue of overlapping applications.

Central Australian Frack Free Alliance Inc (CAFFA) v Minister for Environment & Anor [2024] NTSC 75

The Supreme Court of the Northern Territory rejected a challenge by CAFFA against the Minister for the Environment’s approval of Tamboran Resources’ Environment Management Plan (EMP) for exploratory gas wells in the Beetaloo Basin. CAFFA argued that the Minister’s decision failed to adequately consider long-term climate impacts and greenhouse gas emissions.

The Court dismissed CAFFA’s case on four grounds:

1. Scope of environmental impacts: The Court held that the Petroleum (Environment) Regulations 2016 (NT) require EMPs to address environmental risks associated only with the specific regulated activity (exploration) and not potential future production activities. Any future production would require separate approvals and EMPs;
   
2. Greenhouse gas emissions: The Court found that the EMP met regulatory requirements by asserting no significant greenhouse gas emissions from the exploration activities. It deemed it impossible to quantify broader climate impacts from exploration alone;
   
3. Emergency impacts: CAFFA argued the EMP lacked sufficient analysis of environmental impacts from emergencies. The Court concluded the EMP met statutory requirements and that minor deficiencies did not invalidate it; and
   
4. Referral to the NT EPA: CAFFA claimed the Minister should have referred the project to the NT Environment Protection Authority (NT EPA). The Court clarified that the Minister is not obligated to do so unless a referral has already occurred or been directed by the NT EPA.
   
   

The judgment confirms that EMPs for exploratory activities are assessed solely on their direct impacts and not on future production-phase risks. It also highlights the NT EPA’s role in mandating referrals and enforcing compliance. This decision provides clarity for the mining and resources industry on regulatory obligations for exploratory projects, emphasising compliance with the statutory framework.

Stillwater Pastoral Company Pty Ltd (Stillwater) v Stanwell Corporation Ltd [2024] FCA 1382

On 4 December 2024, the Federal Court dismissed Stillwater’s case against Stanwell Corporation and CS Energy Ltd for alleged misuse of market power under the old Section 46 of the Competition and Consumer Act 2010 (Cth). The case revolved around Stillwater’s claim that Stanwell and CS Energy employed “short-notice rebidding” strategies to create price spikes during high electricity demand periods in Queensland. Stillwater argued this practice deterred competitors and amounted to misuse of market power.

Justice Derrington rejected Stillwater’s arguments on the basis that occasional price spikes were transient and consistent with standard market dynamics and not indicative of substantial market power. The Court also noted that other generators employed similar strategies, reinforcing the absence of unique power or anti-competitive purpose.

The Court found that for there to be a misuse of market power there must be a substantial degree of market power and this requires more than size. Even though Stanwell and CS Energy combined had greater than 50% market share, the competitive constraints such as contractual obligations did not result in them having substantial market power. In addition, to have substantial market power there must be evidence of sustained, non-transient pricing power and there must be an anti-competitive intent – speculation based on behaviour is not sufficient evidence of this.

Justice Derrington emphasised that evidence of mere “hope” for higher prices or strategic behaviour does not equate to the intent required to prove misuse of market power.

This decision underscores the challenges of proving misuse of market power under both the old and current legal tests and highlights the importance of robust evidence in such cases.