Have you caught wind of Australia’s Offshore Wind Regulatory Regime?

The Australian offshore wind sector is burgeoning. Australia is on track to have six offshore wind areas declared by the first half of 2024,[1]. To better harness Australia’s huge offshore wind potential, estimated at 4,963GW,[2] in 2021, Australia enacted the Offshore Electricity Infrastructure Act 2021 (Cth) (OEI Act). The OEI Act provides a regulatory framework for offshore renewable energy and electricity transmission infrastructure.[3]

This article provides an overview of the licencing and approvals regimes pursuant to the OEIA Act and the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act).

Obtaining a licence under the OEI Act

The OEI Act sets four categories of licences for offshore electricity infrastructure:

To obtain a licence, the applicant must meet the merit criteria, which assess the following:[4]

1. applicant’s technical and financial capability to carry out the project;
2. likely viability of the project;
3. suitability of the applicant to hold a licence; and
4. national interest.

Applicants will also be required to provide an ‘approved management plan’ (setting out how the proponent will provide for the offshore electricity infrastructure and manage risks and impacts of the activities to be carried out under the licence) as well as financial security to cover the cost of decommissioning the proposed infrastructure.

As competition is expected to be strong for a spot in the offshore wind declared areas,[5] if two or more applications for a feasibility licence overlap (i.e. wholly or partly cover the same area), the Registrar will assess the applications and advise the Minister, who may refuse the application that is of lesser merit. If the applications are of equal merits, the Minister may invite these applicants to submit revised financial offers.[6]

Licence holders will have continuing obligations, such as providing the Registrar with annual reports and paying annual levies (for example, the total annual levy for a commercial licence will be at least $745,186).[7]

Obtaining approval under the EPBC Act

The EPBC Act set out the approval regime for any action (Controlled Action) that ‘has, will have or is likely to have a significant impact on the environment’ in the Commonwealth Marine Area. This includes offshore wind farms.[8] Under the EPBC Act, the Minister is empowered to assess the impacts of the Controlled Action and make a decision about whether the project should proceed (including conditions).[9]

To guide offshore wind projects’ assessment process under the EPBC Act, in July 2023, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) published the ‘Guidance – Key environmental factors for offshore windfarm environmental impact assessment under the Environmental Protection and Biodiversity Conservation Act 1999 (Cth)’(Key Factors Guidance). The Key Factors Guidance identifies 13 key impacts to be assessed by offshore wind proponents for the purposes of the EPBC Act, including underwater noise, turbine interactions, electromagnetic fields, disturbance of underwater cultural heritage, vessel interactions and invasive marine species.

Interaction between the OEI Act and EPBC Act

The OEI Act and the EPBC Act interact in complex ways.  Depending on the stream, the environmental assessment under the EPBC Act may occur at different stages. The overall process of assessment under both the OEI Act and the EPBC Act is time consuming and may take approximately two-three years.[10]

Please contact our office if you have any questions about the interaction between the OEI Act and the EPBC Act in respect of each licence category identified in the above table.

Relevant regulatory bodies

Proponents will interact with different relevant bodies at various stages of the application process, including:

• The Offshore Infrastructure Registrar (Registrar), with assigned staff from the National Offshore Petroleum Titles Administrator (NOPTA), will assess licence applications and advise the Minister for Climate Change and Energy on licence-related decisions;
• The Offshore Infrastructure Regulator (Regulator), under the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), will assess activities under OEI Act licences (including management plans and lodgement of financial securities), and monitor and enforce compliance against OEI Act requirements; and
• If the project referral indicates potential environmental impacts on Australian Marine Parks (AMPs), DCCEEW will consult with the Director of National Parks (DNP) during the assessment process.

Conclusion

The statutory and common law backdrop for offshore wind is emerging. Offshore wind project proponents must familiarise themselves with the requirements under both the OEI Act and the EPBC Act from project initiation.

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, and construction, including the buying and selling of development and operating projects. For more information, please contact Matt Baumgurtel.

[1] The Hon Chris Bowen MP, Minister for Climate Change and Energy, Speech to Asia Pacific Offshore Wind and Green Hydrogen Summit.

[2] Global Wind Energy Council, Global Wind Report 2022

[3] OEI Act s 3

[4] See OEI Regulations r 26; Guideline on OEI Licence Administration – feasibility licence.

[5] RenewEconomy, Hunter offshore wind zone opens to bids as Bowen urges media to focus on ‘the facts’

[6] OEI Regulations rr15, 16.

[7] the Offshore Electricity Infrastructure (Regulatory Levies) Regulations 2022 (Cth) r 6.

[8] EPBC Act s 23.

[9] EPBC Act Part 9.

[10] DCCEEW – Guidance on Offshore Renewables Environmental Approvals