AUSTRALIA Law and Practice Contributed by: Alexander Danne, Roy Groom, Rohit Venkat and Georgia Summerhill, Clayton Utz
1.3 Foreign Investment Review Process The Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA), Foreign Acquisitions and Takeovers Regulation 2015 (Cth) (FATR), and the Security of Critical Infra- structure Act 2018 (Cth) (SOCIA) form the key body of foreign investment legislation regulating foreign investment protections applicable to the power and energy industry in Australia. Responsibility for decisions regarding policy and approving notifications sits with the Australian Treas- urer (or their delegate), as advised by the Foreign Investment Division of the Australian Department of the Treasury (Treasury). Investments in, or acquisitions of, power industry assets are often captured under the FATA as relating to “critical infrastructure assets”. The acquisition of a stake of 10% or more (or less, where the business will be gaining whole or part control of the entity) in an entity that is the responsible entity for, or a direct inter- est holder in, a “critical infrastructure asset” requires prior approval from FIRB regardless of value, as does the establishment of an Australian business relating to a “critical infrastructure asset”. The term “critical infrastructure asset” is broadly defined under the SOCIA and, relevantly, includes “critical electricity assets”, which are defined as: • networks, systems, or interconnectors for the transmission or distribution of electricity to ulti- mately service at least 100,000 customers; or • electricity generation stations connected to a wholesale electricity market that: • have an installed capacity of 30MW or more; or • are owned or operated by an entity that is con- tracted to provide a system restart ancillary ser- vice. Australia enforces a strict AUD zero threshold for all direct investments made by Foreign Govern- ment Investors (FGIs), requiring mandatory approval for any stake in local business or land. For private foreign investors, monetary thresholds range from AUD0–AUD1.498 billion, depending on the nature of the acquirer and target.
• SA : Entirely private, including AGL, Neoen and Engie. • TAS : Predominantly state owned through Hydro Tasmania. • WA : Mixed – state-owned Synergy and private operators across the WEM and off-grid systems. • NT : Government-owned Territory Generation (sub- sidiary of Power and Water Corporation). • ACT : No territory-owned generation; electricity sourced via the NEM and long-term renewable offtake agreements with private developers. Transmission • NSW : Transgrid (privately owned). • VIC : AusNet Services (privately owned). • QLD : Powerlink (state owned). • SA : ElectraNet (privately owned). • TAS : TasNetworks (state owned). • WA : Western Power (state owned); Horizon Power in regional areas. • NT : Power and Water Corporation (state owned). • ACT : Serviced by Transgrid (privately owned). Distribution • NSW : Ausgrid, Endeavour Energy (privately owned) and Essential Energy (state owned). • VIC : Five privately-owned distributors – CitiPower, Powercor, United Energy, Jemena and AusNet. • QLD : Energy Queensland (state owned) via Ergon and Energex. • SA : SA Power Networks (privately owned). • TAS : TasNetworks (state owned). • WA : Western Power and Horizon Power (state owned). • NT : Power and Water Corporation (state owned). • ACT : Evoenergy (50% state owned, 50% privately owned). Retail/Supply to End-Users • NEM regions : Competitive market dominated by AGL, Origin Energy and EnergyAustralia, with smaller retailers including Alinta and Red Energy. Tasmania retains Aurora Energy (state owned) alongside limited competition. • WA : Synergy (state owned) dominates; limited con- testability for large customers. • NT : Jacana Energy (government owned) is the sole retailer.
12 CHAMBERS.COM
Powered by FlippingBook