New environmental approvals guideline for offshore renewable energy projects

In November 2023, the Australian Government released further guidance on environmental approvals for offshore renewables projects carried out in Australian Commonwealth waters (greater than 3 nautical miles from shore). The Guidance forms part of a series of environmental and licensing guidelines released by the Department of Climate Change, Energy, the Environment and Water (DCCEEW) and the Offshore Infrastructure Regulator in the last five months targeting offshore renewables projects (read our previous analysis here) and details the approval pathways (including indicative timings) for three project types under the Offshore Electricity Infrastructure Act 2021 (OEI Act), specifically: commercial projects, transmission infrastructure projects, and research and demonstration projects.

The purpose of the Guidance is to highlight for proponents and other interested parties the key licensing and approval steps to support efficient primary environmental approval processes for offshore infrastructure activities. In particular, the guideline clarifies that separate EPBC Act referrals for different activities will be required and that any authorisation from the Director of National Parks (DNP) will follow the EPBC referral process. Management plans required under the OEI Act will also need to be adaptive and updated during the life of the project to ensure environmental best practice to protect biodiversity is maintained.

Legal framework

The OEI Act establishes the requirements for the construction, installation, commissioning, operation, maintenance and decommissioning of offshore renewable energy infrastructure and offshore electricity transmission infrastructure. These types of offshore activities are subject to various environmental approval requirements, including under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) if the activity is expected to have a significant impact on a matter protected under Part 3 of the EPBC Act (matters of national environmental significance (MNES)), including the Commonwealth marine area environment.

Any additional Commonwealth approvals will depend upon the location and nature of the activity proposed but could include approval requirements under the Environmental Protection (Sea Dumping) Act 1981 and the Underwater Cultural Heritage Act 2018. Further, any offshore infrastructure activities proposed within an Australian Marine Park (AMP) will require separate authorisation from the DNP (consultation is required where a proposed activity is located outside a marine park boundary but could impact values).

The OEI Act requires the proponent to obtain licences at different stages of a project as well as licences for construction and operation of different infrastructure. These licences are separate to any approvals that may be required authorising activities under the EPBC Act and any other state or territory requirements within state or territorial coastal waters (less than 3 nautical miles from shore). Approval under one Act does not guarantee approval under another. Additionally, there are different timings for assessment timeframes and licensing periods under the various regulatory processes.

Commercial projects

Commercial projects are likely to include offshore infrastructure in the Commonwealth offshore area as well as associated transmission infrastructure that may cross into state or territory waters to transport electricity or other renewable energy products to land. The licensing and environmental approvals process for commercial projects is summarised as 5 key regulatory steps:

1. Commonwealth offshore area declared by Minister for Energy (including public notice period approx. 3-5 months)

In selecting proposed offshore infrastructure project locations within declared areas, the Guidance notes that proponents should be aware of the overlapping nature of declaration areas with existing and future proposed uses and encourages preliminary assessment of site suitability, existing marine uses and users in and around the proposed location and key environmental factors for offshore windfarm environmental impact assessment under the EPBC Act, including potential interactions with AMPs and MNES;

2. Feasibility licence application and assessment by Offshore Infrastructure Registrar (approx. 6-8 months)

Applications are assessed by the Offshore Infrastructure Registrar through a competitive process based on the merit criteria set out in the OEI Act and supporting regulations. Once granted, a feasibility licence can extend to up to seven years.

3. EPBC Act referral and assessment by Minister for the Environment (up to 2-3 years)

Activities that are likely to have a significant impact on MNES require assessment under the EPBC Act. These activities include commercial-scale offshore renewable energy infrastructure developments such as offshore wind farms and can also include early-stage field studies, investigations and surveys regarding the feasibility of such projects. Proponents are required to carry out a self-assessment to decide whether a proposed project is likely to have a significant impact on MNES and are encouraged to request a pre-EPBC referral meeting with the DCCEEW to discuss potential approaches to the referral and likely timeframes. Importantly, the Guidance states that any EPBC referrals for early-stage feasibility works and preliminary surveys that may inform environmental impact assessment for commercial projects should be split out from the main EPBC referral for the construction, installation and operation of the offshore wind farm eg. where an applicant is proposing vessel-based surveys to be conducted prior to the grant of a feasibility licence. According to the Guidance, this is because referring an offshore renewables project under the EPBC Act in Commonwealth waters, without a feasibility license and/or prior to an area being declared for future development is likely to lead to diverting government and proponent resources to projects that may not proceed and the need to vary proposals and associated delays. The Guidance also clarifies that transmission infrastructure required for a commercial project can be included in an EPBC Act referral for the whole project or referred as a separate action;

4. Submission and approval of management plan by Offshore Infrastructure Regulator (approx. 3-6 months)

A management plan is required to be submitted by the feasibility licence holder, and assessed and approved by the Offshore Infrastructure Regulator before a commercial licence can be granted under the OEI Act. Additionally, if feasibility licence activities include the construction, installation, commissioning, operation, maintenance or decommissioning of offshore renewable energy infrastructure, a management plan must be approved before those feasibility activities can commence (including a fixed or tethered infrastructure used to assess the feasibility of exploiting a renewable energy resource). If any authorisation is issued by the DNP (including associated conditions), measures should be included in the management plan to support compliance with the DNP authorisation. The approved management plans are subject to a five yearly review process and may need to be revised to reflect new information and support adaptive environmental management to ensure environmental best practice is maintained for MNES protection over the life of any EPBC approval; and

5. Commercial licence application and assessment by Offshore Infrastructure Registrar (approx. 6 months)

A commercial licence can only be granted to the holder of a feasibility licence and must be granted within an area that is a declared Commonwealth offshore area. The licence authorises activities including the construction, installation, commissioning, operation, maintenance and decommissioning of offshore renewable energy infrastructure. The commercial licence area must be continuous, entirely within the Commonwealth offshore area and the feasibility licence area and must not overlap with any other feasibility or commercial licence areas. Once granted, a commercial licence can extend to up to 40 years.

When all required licences and approvals under the OEI Act have been granted, approvals under the EPBC Act have been obtained, and any other relevant Commonwealth, State and Territory requirements have been complied with, the project may commence. Licence holders are required to remain compliant with the merit criteria, approved management plan, the conditions of their licence, the provisions of the OEI Act and associated regulations, and any other requirements that apply to their activities under the EPBC Act, DNP authorisations or other relevant laws.

Transmission infrastructure projects

Transmission infrastructure projects that do not include an energy generation component within a Commonwealth offshore area may involve storing, transmitting or conveying electricity (which may or may not be generated from a renewable resource) or a renewable energy product. These activities are authorised by a transmission and infrastructure licence under the OEI Act, EPBC Act approvals and DNP authorisation (if applicable) as well as other relevant Commonwealth and state/territory approvals. The licensing and environment approvals process is divided into three key steps:

1. EPBC Act referral and licence application assessment by the Offshore Infrastructure Registrar (approx. 6 months but EPBC Act referral may take up to 2 years)

Any EPBC Act referral assessment will be carried out by the Minister for the Environment (see above discussion regarding commercial projects for more detail). If assessment and authorisation from the DNP is required, allow an additional approximate 8 weeks.

2. Transmission infrastructure licence granted by Minister for Energy

These licences are not restricted to declared Commonwealth offshore areas under the OEI Act so proponents do not need to wait for an area declaration before addressing EPBC Act and DNP requirements relevant to their site.

3. Submission and approval of management plan (approx. 3-6 months)

Once a transmission and infrastructure licence is granted, the licence holder needs to submit a management plan for approval by the Offshore Infrastructure Regulator prior to commencing fixed or tethered infrastructure activities. If EPBC Act and DNP authorisations are required and issued, the management plan should include measures to enable compliance with these approvals.

Research and demonstration projects

Research and demonstration licences authorise research into, or demonstration of, new offshore renewable energy infrastructure or offshore electricity transmission infrastructure on a small or pilot scale. These licences do not authorise the construction or operation of commercial-scale offshore energy generation or transmission infrastructure. Instead, licence holders can construct, install, commission, operate, maintain and decommission offshore renewable energy infrastructure or offshore electricity transmission infrastructure within the licence area so long as there is a management plan in place and activities are conducted in accordance with the licence and management plan conditions. These activities are authorised by a research and demonstration licence under the OEI Act, EPBC Act approval (if necessary), and DNP authorisation (if required) as well as other relevant Commonwealth and state or territory approvals. Overall, the licensing and environment approvals process is divided into four key steps:

1. Commonwealth offshore area declared by the Minister for Energy (including public notice period; approx. 3-5 months)

2. Research and demonstration licence application assessment by the Offshore Infrastructure Registrar (approx. 6 months)

Tthe Guidance recommends proponents submit applications once an offshore area is declared but before seeking approval under the EPBC Act or an authorisation from the DNP (as applicable). Where an EPBC Act approval or DNP authorisation is required, proponents may need to allow additional time for assessment and approval;

3. Research and demonstration licence granted by Minister for Energy

These licences can be granted for up to 10-year terms that can be extended at the discretion of the Minister; and

4. Submission and approval of management plan by Offshore Infrastructure Registrar (approx. 3-6 months)

After any required EPBC Act approval or authorisation from the DNP is granted, proponents should submit management plans for assessment and approval. Once a management plan is approved, research and demonstration activities can commence.

If a research and demonstration project is successful and a proponent wishes to continue onto a commercial project, they will need to apply for and be granted a feasibility licence.