Offshore Electricity Infrastructure Regulations

The first of several sets of regulations that underpin offshore electricity development in Australia has recently been released. These are: 

• The Offshore Electricity Infrastructure Regulations 2022 (OEI Regulations) made pursuant to the Offshore Electricity Infrastructure Act 2021 (OEI Act); and 
• The Offshore Electricity Infrastructure (Regulatory Levies) Regulations 2022 (OEI Levies Regulations) made pursuant to the Offshore Electricity Infrastructure (Regulatory Levies) Act 2021 (OEI Levies Act).

Partner Damian Roe, Special Counsel Alison McKee and Law Clerk Erin O’Shaughnessy outline how these regulations provide greater regulatory certainty for the development of offshore renewable energy projects in Australia and what the next set of regulations may bring. 

Offshore Electricity Infrastructure Regulations 2022  

The OEI Regulations establish arrangements to assist in the operation of the offshore electricity infrastructure framework. Specifically, the OEI Regulations set out: 

• an offshore electricity infrastructure licencing scheme; 
• provisions regarding the application of fees and levies; 
• arrangements for pre-existing infrastructure; and 
• spatial referencing provisions. 

Licencing scheme 

The OEI Act prohibits the construction and operation of offshore electricity generation and transmission without a licence.¹  Part 2 of the OEI Regulations addresses: 

• Licence areas; 
• Applications for licences including: 

o    feasibility licences;
o    commercial licences;
o    research and demonstration licences; and 
o    transmission and infrastructure licences;

• Offering and granting of licences; 
• Extensions and variations to licenses; 
• Licence conditions; 
• Transfers of licences; 
• Change in control of licence holders; and 
• General matters relating to the operation of the licencing scheme (i.e. support by Register and procedural fairness). 

Application fees

Under the OEI Act, the Commonwealth may charge a fee for dealing with an application made, performing functions or exercising power under the OEI Act.² The OEI Regulations prescribe the amounts of fees for dealing with certain applications or the method for calculating the fee. Part 3 of the OEI Regulations specifies a fee amount for the following: 

• Application for a licence; 
• Application to extend the term of a licence; 
• Application to vary a licence; 
• Application to transfer a licence; 
• Application for approval of change in control of licence holder; and 
• Application to surrender a licence. 

Payment of offshore electricity infrastructure levy

In addition to paying fees to the Commonwealth under the OEI Act, certain participants must also pay an offshore electricity infrastructure levy. Part 4 prescribes the timeframe for payment of an offshore electricity infrastructure levy, being 30 days after the beginning of the period, and sets out who the levy must be paid to, either the Registrar or the Regulator. 

Spatial referencing 

Under the OEI Act, the Minister may declare an area in the Commonwealth offshore area as suitable for OEI activities. ³ The precise location is determined through the use of a datum. Under s 9(2)(a) of the OEI Act, the OEI Regulations may substitute an alternative datum for the OEI Act. The OEI Regulations provide the position on the surface of the Earth of a point, a line or an area is to be determined by reference to the Geocentric Datum of Australia as defined in Gazette No. 35 of 6 September 1995 (GDA94 geocentric data set).

Pre-existing infrastructure 

The OEI Act exempts from the operation of the Act certain pre-existing infrastructure. ⁴ The OEI Regulations extend the definition of pre-existing infrastructure to offshore renewable energy infrastructure or offshore electricity infrastructure constructed, installed or commissioned for the purposes of operating, maintaining, repairing or replacing pre-existing infrastructure.

Offshore Electricity Infrastructure (Regulatory Levies) Regulations 2022

The OEI Levies Act pre-establishes an infrastructure levy that certain participants must pay, including the amounts and operating parameters of the levy. Additional operating parameters for levies are prescribed in Part 4 of the OEI Regulations. 

Sections 5 – 8 of the OEI Levies Regulations impose different kinds of levies on different types of licence holders. For each licence holder, the OEI Levies Regulations set out tables which include the following information: 

• the different kinds of offshore electricity infrastructure levies imposed on the licence holder; 
• the amounts of those levies including, where necessary, the method for calculating them; and 
• the period for which those levies must be paid.

Section 9 of the OEI Levies Regulations clarifies the period in which the full amount of the levy is imposed, being the start of the 12-month period. 

The final part of the OEI Levies Regulations establishes the method for calculating any necessary adjustments to the amounts of an offshore electricity infrastructure levy payable. Section 10 sets out the adjustments made to a levy where a licence ceases to be in effect during a payment period and section 11 sets out the adjustments made to a levy where parts of licence areas become vacated areas during a payment period. 

Next steps 

With the rapid release of these regulations, we expect that the next set of regulations necessary for the operation of the offshore electricity infrastructure framework (which are currently under development) will be released soon. These regulations are to include arrangements for management plans, financial security, safety and protection zones, and work health and safety. We will continue to monitor the release of these regulations and provide an update once released.  

1. Offshore Electricity Infrastructure Act 2021 (Cth) s 15. 
2. Offshore Electricity Infrastructure Act 2021 (Cth) s 189(1). 
3. Offshore Electricity Infrastructure Act 2021 (Cth) s 17.
4. Offshore Electricity Infrastructure Act 2021 (Cth) s 309.