Australia’s nascent offshore wind industry breathed a collective sigh of relief when, in December of last year, the Offshore Electricity Infrastructure Act officially – and finally – passed through Parliament and paved the way for projects to be developed in Australian waters.
But a legal expert has this week warned that a great deal of legislative red tape remains to be cut through to facilitate the establishment of an offshore wind sector in Australia – and particularly to the sort of ambitious timelines set out by the new Victorian targets.
Furthermore, despite the obvious parallels between offshore wind and the offshore oil and gas sector, few of the regulatory work-arounds and streamlining mechanisms used in the licensing process for fossil fuel projects have so far been extended to offshore wind.
Speaking at the 2022 Wind Industry Forum, hosted by the Clean Energy Council in Melbourne, Allens partner Melissa Keane said that while the passage of the federal Act was a good start for the offshore wind industry, there remained “various” important issues the legislative framework didn’t deal with.
“One is understanding how the licenses will be assessed and allocated – there isn’t much insight under the act itself,” Keane told the conference on Thursday.
“There is also limited understanding on how the interaction will happen between the state and territory governments and this will be critical, in particular for the transmission infrastructure.
“The other aspects it doesn’t deal with is the other types of approvals and key government support like offtake arrangements, so it doesn’t deal with the way in which electricity will be paid for,” she said.
“It doesn’t deal with environmental improvements approvals, which will be required under the existing legislation as it stands.”
But perhaps the biggest hurdle, is the age-old Australian developmental speed-hump that is the divide between the state and the federal governments.
“The fact that Australia is established under its constitution as a federation of states and territories, operating alongside the Commonwealth Government does introduce a complication that’s not seen in other jurisdictions in which offshore wind is already well developed,” she said.
This is a particularly tricky problem for offshore wind, due to the fact that while the vast majority of offshore turbines are expected to be installed in Commonwealth waters, developers also need to secure the rights to install transmission infrastructure across or under the seabed and over land that’s governed by the state.
And as Keane pointed out, the states and territories “very helpfully” all have different legislative frameworks for the granting of licenses and easements.
In Victoria, for example, Keane says the majority of coastal reserve land is managed under the Victorian Crown land reserves Act, while the seabed is likely to request specific consents under the Land Act.
“So there’s an awful lot of sort of regulation, which is why you need a lawyer.”
Keane notes that in the oil and gas sector, on which the Commonwealth framework for offshore wind is based, exploration and production can only happen in Commonwealth waters with approval from a “joint authority,” which is generally made up of the responsible federal minister and relevant state or territory minister.
And yet, “despite this parallel with the offshore oil and gas framework, there are no indications at this stage that we’re going to see similar mirroring legislation. So there’s definitely that consultation interaction element that still remains to be sorted out.”
Another big question mark also hangs over how the actual allocation of licences or the declaration of sea areas – like renewable energy zones in the water – will be made.
“This is still unknown,” says Keane, “but looking [again at the parallels with the offshore oil and gas sector], the petroleum sector does indeed seek nominations from private, or the public generally, but from private investors around areas that might be suitable for investment.
“So we do hope that there will be similar consultation had for areas that the minister could consider for declaration, in the case of the bidding process as well.
“While we don’t think there will necessarily be joint authorities, we do nonetheless expect there will be some consultation through that process and …[the development of] guidelines, so that people can be fully aware of what will be required when when making those applications.”
According to RenewEconomy’s Offshore Wind Energy Map of Australia, there are currently just under 20 projects being proposed for development around Australia’s coastline, ranging in size from 300MW to a 3GW project proposed at the beginning of this month by Copenhagen Energy for off the WA coast.
Among those projects is the 1GW Great Southern wind farm, proposed for development in Victoria’s Bass Coast by Macquarie Green Investment Group.
Anthony Lamb, MGIG’s co-head of offshore wind Asia-Pacific, told the Wind Industry Forum on Thursday that he agreed with Keane, that the establishment of the Offshore Electricity Infrastructure Act was “just the beginning” of what was needed to get the sector up and running.
“We have found these issues in many of the jurisdictions we operate in, where kind of obscure little rules that weren’t written with with offshore wind in mind have threatened multi-billion dollar projects,” Lamb said.
“And the solution has always been… a collaborative effort between developers, government – at a national and local level – and other interested parties to get together and work through those issues.
“Because generally there’s a workable solution. It just takes discussion and cooperation. So we envisage there’ll be a lot of that.”
