Opportunities for Offshore Wind
Offshore Wind
Offshore wind projects present significant opportunities to decarbonise and boost Australia’s economy. Federal and State governments have been laying regulatory foundations, declaring six offshore wind areas across four states. The recent Winds of Opportunity report from the Clean Energy Council estimates these areas represent potential capacity of 67.4GW of wind generation capacity, and that delivering just 20GW could boost Australia’s economy by up to $15.2 billion.
Despite this opportunity, offshore projects have faced lengthy delays. The Winds of Opportunity report identified complex regulatory processes and risk of project delays as a key barrier to unlocking offshore wind, noting specifically the potential duplication of State and Federal approval processes.
Commonwealth legislative framework
There are two key pieces of Commonwealth legislation regarding offshore wind projects: the Offshore Electricity Infrastructure Act 2021 (Cth) (OIE Act) and the Environmental Protection Biodiversity Conservation Act 1999 (Cth) (EPBC Act).
The Commonwealth Government: Offshore renewables environmental approvals guidance document (Commonwealth Guidance) sets out the general five-step process to establish a commercial offshore wind project that incorporates both the OIE Act and the EPBC Act:
1. Area declarations: The Minister for Energy must declare an area suitable for offshore renewable energy infrastructure;
2. Feasibility licencing: The Minister for Energy may invite applications for a feasibility licence that grants authority to assess the feasibility of a particular area;
3. EPBC referral: Where a proposed project, or any stages of the project, may have a significant impact on the environment it requires referral under the EPBC Act. Where a project is proposed in an Australian Marine Park, authorisation will also be required from the Director of National Parks;
4. Management plan submission: A management plan must be submitted in accordance with the OEI Act for the construction, installation, operation, maintenance and decommissioning of offshore wind projects. Where a project has been referred as Step 3, the management plan must describe any obligations under the EPBC and associated regulations; and
5. Commercial licencing: Once a management plan has been approved, a commercial licence may be granted which enables the licence holder to conduct the operation. A commercial licence generally has a term of 40 years.
The Commonwealth Guidance provides for the potential of two other related licences to be granted subject to the OEI Act, EPBC Act, and relevant state and territory authorisations:
· Transmission and infrastructure licence: authorises transmission and infrastructure activities that do not include energy generation but may involve storing, transmitting or conveying electricity.
· Research and demonstration licence: authorises research into, or demonstration of, new offshore renewable energy infrastructure or transmission infrastructure on a small, pilot scale.
The Department of Climate Change, Energy, the Environment and Water have developed a specific guidance document of the key environmental factors for offshore windfarm environmental impact assessment under the EPBC Act which may be useful for proponents.
Western Australian legislative framework
Western Australia does not have specific legislation in relation to offshore wind projects. However, where any proposal in Western Australia is likely to have a significant impact on the environment, referral and assessment under the Environmental Protection Act 1986 (WA) is required. The result is that where a proponent is required to refer their proposal to the Commonwealth, it is likely they would also be required to refer the proposal to the EP Act.
Progress in Western Australia
The Bunbury Offshore Wind Project has progressed to the next stage with the announcement of a preliminary feasibility licence decision subject to consultation with First Nations groups. It is a welcome announcement in the context of delays in progressing offshore wind across Australia. If constructed, the project has the potential to generate 1.5GW of renewable energy and power over 1 million homes.
Two other projects in the South West have been shortlisted for feasibility licences pending a resolution between the applicants that the project areas are amended so that they do not overlap. Regardless, last year’s ruling by the Federal Court in Seadragon Offshore Wind Pty Ltd v Minister for Climate Change and Energy clarified that where feasibility licence applications overlap, the Minister may grant a licence for a smaller area than originally specified in the application.
Conclusion
Offshore wind presents significant opportunities to both decarbonise and boost Australia’s economy, however projects across Australia are facing lengthy delays in part due to regulatory barriers. The current system results in licences issued under the OEI Act being separate to any approvals granted under the EPBC Act, and any approvals from state environment agencies separate again. Approval under one Act or in one jurisdiction do not guarantee approval under another, creating uncertainty for potential proponents.
The Winds of Opportunity report noted that in other countries centralised models have worked to speed up timelines and avoid stakeholder fatigue. The report highlighted the Danish Energy Agency as an example of a ‘one-stop-shop’ that streamlines the approval process of offshore wind projects by creating a single interface to ensure transparent and efficient procedures.
A similar centralised system has previously been implemented by the Federal Government for approvals of offshore petroleum and greenhouse gas storage activities. Under this system, NOPSEMS acts as the coordinating regulatory body to overcome duplication between state and federal approval processes. The Winds of Opportunity report recommends an investigation into accrediting the Offshore Infrastructure Regulatory with similar powers of approval.
References
· https://www.dcceew.gov.au/energy/renewable/offshore-wind/areas/bunbury
· https://www.dcceew.gov.au/about/news/next-steps-offshore-wind-bunbury-wa