Australia finalises new regulations for offshore wind projects

What you need to know

• Many months after public consultation on an exposure draft released in April 2024, the much-awaited Offshore Electricity Infrastructure Amendment Regulations 2024 (Cth) have been finalised and came into force on 12 December 2024.
• Further regulations – the Offshore Electricity Infrastructure Amendment (Overlapping Applications) Regulations 2024 (Cth) – came into force on 14 December 2024, and will be made retrospective by legislation passed by the Parliament on 13 February 2025.
• Together, these amendments represent the largest update to the OEI Regulations since their commencement in 2021 and provide a fulsome regulatory framework for offshore wind proponents in Gippsland (and other declared areas in due course) to progress their feasibility activities.

What you need to do

• For feasibility licence holders in Gippsland, ensure you are meeting the consultation and content requirements for management plans now specified in the OEI Regulations.
• Look out for our further alerts discussing these requirements in further detail.

Offshore Electricity Infrastructure Amendment Regulations 2024

The much-awaited Offshore Electricity Infrastructure Amendment Regulations 2024 (Cth) (OEI Amendment Regulations) came into force on 12 December 2024. As a result, the Offshore Electricity Infrastructure Regulations 2021 (Cth) (OEI Regulations) now provide the detail which offshore wind developers need to progress the design of their projects, prepare and consult on management plans, and carry out feasibility activities.

In addition, the Offshore Electricity Infrastructure Amendment (Overlapping Applications) Regulations 2024 (Cth) came into force on 14 December 2024, in response to the Federal Court's 2024 decision in Seadragon Offshore Wind Pty Ltd v Minister for Climate Change and Energy [2024] FCA 1290. For more about this decision, see our 23 December 2024 alert "Minister's refusal to grant an Offshore Wind Feasibility Licence overturned".

Together, these amendments represent the largest update to the OEI Regulations since their commencement in 2021.

This is the first in a series of alerts about the reforms, and contains a high level summary of the key changes.

Further alerts will focus on:

• the management plan approval pathway for offshore wind proponents;
• the content requirements for feasibility licence management plans;
• feasibility licence holders' obligations to consult with stakeholders in relation to various matters covered by the OEI Regulations;
• work health and safety in the offshore wind context; and
• further regulatory updates expected in the coming years as offshore wind proponents get ready to move to the commercial licence stage.

Outline of the key reforms

The OEI Amendment Regulations cover:

• management plans, which must be approved before a licence holder may construct, install, commission, operate, maintain or decommission offshore electricity infrastructure in accordance with a feasibility licence or other licence under the OEI Act;
• design notifications, which provide an opportunity for licence holders to seek feedback from the Offshore Infrastructure Regulator (OIR) on layout and other project design matters, and will be a mandatory step before applying for approval of a management plan for a commercial licence or certain transmission and infrastructure licences;
• financial security for decommissioning and seabed remediation costs;
• offences (mostly strict liability) for non-compliance with the OEI Regulations;
• safety and protection zones, in particular the process to apply for safety and protection zones, how the OIR will decide applications, and the publication of safety zone and protection zone determinations;
• work health and safety, in particular amendments to the Work Health and Safety Regulations 2011 (Cth) to tailor those regulations, particularly in relation to diving work, to the offshore wind context;
• record keeping; and
• fees.

In addition to the reforms to the OEI Regulations, the OIR has published nine new guidelines and eight new policies covering matters including applications to the OIR, environmental management, information-sharing, investigation and enforcement. These guidelines and policies provide further clarity to offshore wind proponents about how the OIR will approach its statutory functions.

Key reforms in the Offshore Electricity Infrastructure Amendment Regulations 2024

Management plans & consultation requirements

Part 3 of the updated OEI Regulations now provides a detailed process for offshore wind licence holders to follow in order to carry out feasibility licence activities, such as installing infrastructure in the seabed to assess the feasibility of a proposed offshore wind project.

For feasibility licence holders, the OEI Regulations clarify the next steps before they can begin carrying out licence activities in their feasibility licence area. In particular, they will need to:

• prepare a management plan that covers the planned feasibility licence activities and all of the other matters prescribed by the OEI Regulations;
• identify and consult with certain persons, communities and groups that may be affected by the activities authorised by the management plan and keep consultation records; and
• submit an "initial plan approval application" and pay the $10,000 application fee.

Our further alerts will cover the management plan process and content and consultation requirements in more detail.

The process is generally consistent with that proposed in the Government's April 2024 exposure draft of the OEI Amendment Regulations (Exposure Draft). However, feasibility licence holders who have already begun preparing and consulting on management plans should be aware of some key changes from the Exposure Draft. In particular, under the new OEI Regulations:

• the standard timeframe for the OIR to assess a management plan has been shortened from 90 days in the Exposure Draft to 60 days (section 67 OEI Regulations), though the OIR may still extend this standard timeframe by written notice to the licence holder setting out the reasons for the extension;
• the list of persons who must be consulted (section 64 OEI Regulations) has been narrowed from the Exposure Draft. For instance, in respect of consultation with First Nations people and organisations, the reference to "sea country" (which was undefined in the Exposure Draft) has been omitted in the finalised regulations.

Design notifications

The updated OEI Regulations now provide an opportunity for offshore wind proponents to seek OIR feedback on project design matters through "design notifications".

These notifications will be a mandatory step in the process to:

• obtain a commercial licence for the construction and operation of offshore wind farms (because a feasibility licence holder will be required to submit a design notification to the OIR, and receive OIR feedback, before applying for approval of a commercial licence management plan, which in turn is required before applying for a commercial licence); and
• obtain approval of a management plan for a transmission and infrastructure licence that would authorise storing, transmission or conveying electricity or a renewable energy product (ie the installation and operation of storage and transmission infrastructure outside a feasibility licence area or commercial licence area).

Feasibility licence holders may choose to submit a design notification in relation to any of their proposed feasibility infrastructure, if OIR feedback on the design of any feasibility infrastructure would be useful.

Financial security

Once a management plan is in place for any OEI licence, the licence holder must provide financial security to the Commonwealth to cover any costs that might arise in connection with decommissioning and removing licence infrastructure and remediating the licence area (s 117 of the OEI Act).

A new Part 4 of the OEI Regulations now provides further detail in relation to financial security requirements, including:

• financial security may be provided in the form of a cash deposit, credit facility, bank guarantee or general insurance policy, but not by self-insurance, a trust arrangement with the Commonwealth as beneficiary, or a company guarantee provided by a related body corporate of the licence holder;
• while licence holders will generally be able to choose the form of financial security to provide, the Minister may make a determination of a particular form that a licence holder must provide;
• consistent with the Exposure Draft, licence holders will be required to calculate the amount of financial security to be provided and describe the calculation method in the corresponding management plan, but under a new section (not included in the Exposure Draft) the OIR may direct a licence holder to arrange an independent verification of the calculation method and/or actual calculation of the financial security amount;
• as explained in the Explanatory Statement, the return of financial security has been "decoupled" from management plans as had been proposed in the Exposure Draft. Instead, financial security may be returned to a licence holder where the Minister has determined that an amount of financial security is no longer required or can be reduced or where the relevant licence is transferred and the transferee has provided its own financial security.

In addition to Part 4, consistent with the Exposure Draft, the Minister may only grant a commercial licence if the applicant has complied with any requirement to provide an amount of financial security.

New strict liability offences

The OEI Regulations now include a number of new offences in relation to compliance with management plans, revising management plans in certain circumstances, record-keeping and reporting obligations.

These include the following offences which were not included in the Exposure Draft:

• an offence for licence holders who carry out licence activities "in a way that is contrary to the management plan" for the licence. The penalty is 50 penalty units ($16,500) plus a further 5 penalty units ($1,650) for each subsequent day during which the offence continues (section 46 OEI Regulations); and
• offences for licence holders who do not comply with new obligations to notify the OIR of certain events (eg a collision between a vessel and offshore wind infrastructure, or implementation of the emergency response plan in a management plan) and submit reports in relation to those events (sections 161-163 OEI Regulations).

Other than a failure to notify the OIR of certain events, all offences under the OEI Regulations are strict liability offences, which means there are no fault elements for any of the physical elements of the offence. The Explanatory Statement to the OEI Amendment Regulations explains the Government's rationale for making most offences ones of strict liability. For example, the offence for non-compliance with management plans arises where licence holders "can reasonably be expected to know the legislative requirements and comply with them because they prepared the management plan".

OEI inspectors appointed by the OIR can issue infringement notices in respect of the any of the strict liability offences under the OEI Regulations, and the Offshore Infrastructure Registrar can issue infringement notices for the record-keeping offences under section 143 of the OEI Regulations.

New condition on all feasibility licences regarding Australian supply chain and workforce analysis report

Under a new section 33A of the OEI Regulations, all feasibility licence holders must submit a report addressing the supply chain and workforce needs, business opportunities, and contributions to the Australian economy and communities, of the proposed commercial offshore wind project. The deadline for submitting this report is:

• 12 December 2026, for feasibility licences granted before 12 December 2024; or
• within 2 years after the grant of the licence, for feasibility licences granted on or after 12 December 2024.

Safety and protection zones

Parts 5 and 6 of the OEI Regulations now provide a framework for applications for, and determinations of, safety zones and protection zones under the OEI Act. Safety zones are areas around certain offshore wind infrastructure (eg offshore wind arrays, substations, cables connecting infrastructure within the same licence area) which must not be entered by vessels, or particular kinds of vessels, as determined by the OIR. Protection zones are areas around offshore wind infrastructure where certain activities involving a serious risk to human safety, or to damage of offshore wind infrastructure, are prohibited or restricted as determined by the OIR.

Any person may apply to the OIR to make a determination of a safety zone or protection zone. Applications for safety zones will be notified to any affected licence holders (if the licence holder is not the applicant). Applications for protection zones will be published on the OIR website and the OIR must invite and take into account submissions from the public made within a specified period.

As with management plans, the standard timeframe for the OIR to determine a safety/protection zone application is 60 days, but the OIR may still extend this standard timeframe by written notice to the applicant setting out the reasons for the extension. For protection zone applications, the 60 day period is paused for the period during which the OIR is accepting public submissions.

Once a zone is in place:

• for safety zones, only the applicant for that zone or a licence holder whose licence area overlaps with that zone may apply to vary or revoke the safety zone determination;
• for protection zones, only the applicant for that zone may apply to vary or revoke the protection zone determination.

WHS notification obligations

Schedule 1 to the OEI Regulations now sets out a number of amendments to the Work Health and Safety Regulations 2011 (Cth) to tailor those regulations, particularly in relation to diving work, to the offshore wind context. The new regulations are similar to those in the Offshore Petroleum and Greenhouse Gas Storage (Safety) Regulations 2009 (Cth) which provide a better model for the deep-sea diving that will take place for offshore wind projects.

Diving work must not be carried out for a project unless:

• there is a diving safety management system (DSMS) that has been accepted by the OIR;
• there is a diving project plan that has been approved by the relevant OEI licence holder; and
• the OEI licence holder has given the OIR a start-up notice for the diving project.

The timing and content requirements of these documents are set out in the OEI Regulations.

Key updates from Offshore Electricity Infrastructure Amendment (Overlapping Applications) Regulations 2024

As explained in our 23 December 2024 alert "Minister's refusal to grant an Offshore Wind Feasibility Licence overturned", in 2024 the Federal Court set aside the decision of the Minister for Climate Change and Energy to refuse to grant a feasibility licence to Seadragon Offshore Wind Pty Ltd because the Minister erred in believing he did not have the power to grant a feasibility licence for an area smaller than the area described in the relevant feasibility licence application. The Court noted that, while the OEI Regulations dealt with overlapping applications of equal merit, they did not adequately deal with overlapping applications of unequal merit.

In response to Seadragon decision, in December 2024 the Government inserted a new section 11A into the OEI Regulations (Offshore Electricity Infrastructure Amendment (Overlapping Applications) Regulations 2024 (Cth)) clarifying that, where a feasibility licence application overlaps another application with unequal merit, the Minister must not grant a licence in respect of the application of lower merit. This new section effectively confirms the approach the Minister took in the Seadragon matter in relation to licence applications made on or after 14 December 2024, but did not fix the invalidity of the Minister's decision in respect of Seadragon.

On 13 February 2025, the Parliament passed the Electricity Infrastructure Legislation Amendment Bill 2025 (Cth) amending the OEI Act to extend the application of the Offshore Electricity Infrastructure Amendment (Overlapping Applications) Regulations 2024 (Cth) to all feasibility applications. As a result, subject to this bill receiving royal assent, the Minister's decision in the Seadragon case has been retrospectively validated.

Want to know more?

• Australia's offshore wind industry: 2024 year in review (11 February 2025)
• Minister's refusal to grant an Offshore Wind Feasibility Licence overturned (23 December 2024)
• Feasibility Licences for Offshore Wind Projects (9 November 2023)
• Offshore Wind: What you need to know when applying for an offshore electricity infrastructure licence (18 November 2022)
• Australian Parliament passes the Offshore Electricity Infrastructure Bill 2021 (3 December 2021) 
• Offshore wind New framework for offshore electricity infrastructure (10 September 2021)

Authors: Fergus Calwell, Lawyer; Anna Seddon, Senior Associate and Jeff Lynn, Partner.