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Published
11/03/2022
On the 2nd of December, 2021, the Offshore Electricity Infrastructure Act received royal assent. The Act is the critical first step to establish an offshore renewable energy generation and transmission industry in Australia.
What does the Act do?
As is common in a regulatory regime, the Act bans all unauthorised offshore infrastructure activities in the Commonwealth offshore area (waters beyond three nautical miles from the shoreline to the outer edge of Australia’s Exclusive Economic Zone), then exempts those that are authorised by a licence or otherwise authorised or required by or under the Act.
With global renewable energy technology advancing at a rate of knots, the Act remains technology agnostic and is intended to provide a framework for current and emerging technologies including wind, wave, tidal, solar, potentially hydrogen, and combination generation projects.
It steps through provisions that give industry assurance about the regulatory process for the construction, operation, maintenance and decommissioning of offshore electricity infrastructure.
Is a licence one-size-fits all?
No, there are three licence streams depending on what a proponent intends to use an area for.
Commercial: This licence stream is intended for commercial- scale projects intended to generate electricity through Offshore Renewable Energy Infrastructure (OREI), such as fixed or tethered wind turbines. This stream involves two licence types—feasibility and commercial—with the grant of the feasibility licence being a precursor for the grant of a commercial licence. The feasibility licence is intended to allow industry stakeholders to exclusively explore a space, test their existing and developing technology, and prepare a detailed management plan that will then be used by the Regulator in the assessment of their suitability for a commercial licence. A commercial licence authorises the licence holder to carry out an offshore infrastructure project for the purpose of exploiting renewable energy resources.
Research and demonstration: This licence authorises research into, or demonstration of, offshore renewable energy infrastructure or offshore electricity transmission infrastructure. It is intended to allow non-exclusive access to the Commonwealth offshore area to pursue research and development of technologies to better enable Australia’s offshore renewable energy industry in the future.
Transmission and infrastructure: This licence authorises the storage, transmission, and conveyance of electricity (both from renewable and non-renewable sources) or a renewable energy product (i.e. a charged storage unit). This licence type has broader applications than just new renewable energy projects in the offshore environment. It has the potential to also enable interstate electricity transmission (i.e. Tasmania to mainland Australia) and even between Australia and our international partners through projects such as SunCable that seeks to export Australia’s sun to Singapore
While there are streams of licence types, they are all regulated in more or less the same manner. The licensing scheme covers applications for licences, offering and granting of licences, transfer of licences, changes in control of licence holders, management plans, and any other matter that the Act provides for the licensing scheme to deal with.
I want to build an offshore wind farm—where can I do it?
The Act empowers the Minister to declare a specified area suitable for offshore infrastructure activities. In determining whether an area is suitable, the Minister will consider the existing uses of the area and seek to identify where potential interactions between offshore infrastructure activities and other marine uses may occur. There may be some areas that are excluded from declared areas where existing uses are considered incompatible with energy generation and transmission activities.
What will the Registrar and Regulator do?
While not a conventional choice for a predominantly (if not exclusively) renewable energy generation and transmission framework, the National Offshore Petroleum Titles Administrator (NOPTA) and the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) will perform the function of the Offshore Infrastructure Registrar and Regulator respectively. These two existing bodies have developed a highly specialised understanding of the offshore environment and its regulation in the high-risk context of petroleum.
The Registrar has a range of functions related to supporting the Minister in performing the Minister’s functions and exercising powers under the Act, work with the Regulator to administer and enforce the Act as it relates to work health and safety and with other Commonwealth agencies and authorities relating to the regulation of offshore infrastructure activities, and other functions conferred on the Registrar by the Act.
The Regulator is responsible for promoting the work health and safety of persons engaged in offshore infrastructure activities, and the investigation and compliance enforcement functions relating to persons that have obligations under the Act. The Regulator also has the function of reporting to the Minister on any issues of work health and safety, environmental protection and infrastructure integrity.
What about renewable energy between the coast and the 3nm limit?
The Act remains silent on offshore energy infrastructure activities that operate in Australia’s “coastal waters”. This means that each of the states are free to regulate offshore energy infrastructure activities in this zone, including any transmission cables that run from the Commonwealth offshore area to the coastline. In practice, this will require companies seeking to apply under the licensing scheme to engage with States to ensure any energy generated can make it onshore (and then eventually plugged into the National Grid) through arrangements between the company and States. We’ve seen the first of these types of arrangements very recently (23 November 2021) with the Victorian Government and Star of the South partnering to the tune of $43.1 million to develop Australia’s first offshore wind farm.
What’s next?
The Act commences on a single day fixed by Proclamation. Around the same time we will see regulations with further details on the licensing scheme, in particular. It’s also very likely that the first of the declared areas will be coming shortly after the date of that Proclamation. Exciting times ahead!
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