Consultation commences for the first of the six areas identified for offshore wind in Victoria

15 August 2022 

The transition towards a more sustainable future is underway as Australia begins to embrace the UN’s Global Roadmap milestone of achieving net-zero emissions by 2050. With the findings of the State of the Environment Report providing a grim prognosis for the Australian environment, it is clear that reducing emissions is a key feature of the national conversation, as evidenced by the discourse during the Federal election campaign in the lead-up to the May 2022 election.

The Offshore Electricity Infrastructure Act 2021 (Cth) (the Act) and the Offshore Electricity Infrastructure (Regulatory Levies) Act 2021 (Cth) commenced on 2 June 2022. The Act provides a framework for proponents to apply for statutory licences to use the seabed for offshore electricity infrastructure activities and allows for the construction, operation, maintenance and decommissioning of offshore electricity projects. Chapter 3 of the Act addresses the licensing scheme covering feasibility, commercial, research and transmission activities. A precondition to the granting of a feasibility licence under the Act is a declaration by the Minister that the area is suitable for offshore renewable energy infrastructure (Chapter 2, Part 2 of the Act).

On 5 August 2022, six proposed areas were identified as suitable for offshore renewable energy. The Honourable Chris Bowen MP, the current responsible Commonwealth Minister for the Act has nominated the Bass Strait off Gippsland, Victoria as the first offshore wind area to be formally assessed under the Act and has invited the public to comment on the notice for the proposed Gippsland area as is required under section 18 of the Act. 

The Department of Climate Change, Energy, Environment and Water (the Department) has undertaken preliminary consultation with a number of Commonwealth and Victorian Government agencies to identify interests in the area, and has developed a non-exhaustive list of identified interests. These are:   

• commercial fishing: commercial fishers in the region operate under a range of licensing systems, with many holding licences to fish in several fisheries managed by State and/or Commonwealth authorities; 
• recreational fishing: Gippsland has over 500 kilometres of coastline offering extensive recreational fishing opportunities; 
• natural environment: the region is also home to a range of marine ecosystems protected by a series of Commonwealth and State Marine Parks;
• Native Title and sea country: while no Native Title claims overlap the proposed offshore area, Traditional Owners have a vested interest in the offshore region, including cultural heritage;
• existing titles and infrastructure: the Gippsland region has a significant association with coal mining and electricity generation and holders of existing titles and owners of existing infrastructure;
• tourism: major attractions include Wilsons Promontory National Park, vineyards, food outlets selling local produce and smallgoods, beaches and abundant wildlife;
• defence: there are two active defence sites near the area (the Royal Australian Air Force Base East Sale and the West Head Gunnery Range);
• vessel traffic: the area off Gippsland sees a high volume of shipping traffic heading to a variety of locations, including the Port of Melbourne which sees around 3000 commercial ship visits each year; and
• weather radar: the Bureau of Meteorology operates several weather radars which provide weather information and forecasting for the region. 

Once the consultation period has ended, the Minister will consider all submissions and the potential impacts offshore renewable energy projects may have on other users and interests. If the Minister declares the area, and feasibility licences are granted, developers will be allowed to investigate the area and begin planning their project. 

During the feasibility licence period, which is up to 7 years, developers must prepare a management plan. To develop these plans, developers will need to consult with the local community and demonstrate how they will share the area with other users. 

The management plan must be approved by the regulator before an application for a commercial licence can be granted. Developers must also ensure they have received all other relevant approvals (including environmental approvals) and undertake any other consultation processes, before they can apply for a commercial licence. 

If the commercial licence is granted, which is for a period of 40 years, the construction of the wind farm can commence. 

For information on the steps required to obtain a commercial licence, see here.

The nomination of the first area to be assessed for offshore wind in Victoria is another step in the right direction to enable offshore wind to become a reality in Australia.  The Commonwealth and State Governments will need to work together to pave the way for the offshore wind industry. PwC Legal will continue to report and analyse this journey and bring you insights, including on the interface between Commonwealth and State approvals and consultation processes under the relevant legislation.