Late last year, the Australian Government passed the Commonwealth Offshore Electricity Infrastructure Act 2021 into law.
The Act has established a regulatory framework for the development of offshore electricity infrastructure in Australian waters for the very first time. This includes the assignment of a regulatory body – the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) – and the creation of a licensing framework through which developers can gain approval to investigate, develop and operate new energy projects offshore.
Those of us who work in offshore wind have been eagerly awaiting the release of the Offshore Electricity Infrastructure Regulations that support the Act – the mechanisms that will allow our industry to successfully license, and eventually construct offshore wind farms. In March, the Commonwealth Government released the draft regulations for public comment (submissions close on 22 April 2022 and can be made here).
When applying for a feasibility license, the draft regulations stipulate that a number of criteria are met. These include:
When preparing a feasibility license application, proponents must provide details about:
When preparing an application, license seekers will need to demonstrate how their project stacks up from a technical and commercial perspective, and their own capacity for seeing the project through.
Past performance of the applicant and/or parent company and its directors may also be considered during the licensing assessment and decision-making process.
The Commonwealth Government has introduced the Offshore Electricity Infrastructure Act 2021 to support the establishment of a successful offshore renewables sector that will help Australia decarbonise its energy landscape.
Doing so is in the national interest, and operators who wish to apply for licenses must demonstrate that their projects are as well.
In assessing applications, the Regulator will consider how projects contribute to (or erode) Australia’s national interests, including:
Recognising that there may be instances where applications for a feasibility license are submitted at the same time and cover the same area (wholly or in part), the draft regulations put the following process forward for assessment and decision-making:
The Offshore Electricity Infrastructure Act 2021 and supporting regulations will operate on a cost recovery basis – meaning fees charged to projects are designed to cover only the costs incurred by the Government in regulating the industry, and not to generate additional revenue. We believe that the application fee bracket should work to discourage speculative submissions.
The remainder of the Commonwealth’s cost recovery will come in the form of annual levies broken down into a base rate for the first 100km2 per license type, and a variable component based on a project’s size.
Where projects require a Transmission and Infrastructure License, this is charged at essentially a flat rate (regardless of area).
The draft regulations are another important step forward for the offshore renewables industry, providing additional certainty and direction to offshore wind developers about the pathway towards construction and operation.
RPS is continuing our work with clients to prepare projects for the license application process ahead (and beyond to construction and operations), and we look forward to the release of the next tranche of supporting documents by the Department of Industry, Science, Energy and Resources in the second half of 2022. We expect these to include more technical detail around the content requirements for the Management Plans that need to be approved by NOPSEMA before a license is issued.
Tony Judd
Practice Leader – Environment & Approvals, VIC
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