Winds of change: offshore wind regime and supports grow

By Melissa Keane, Anne Beresford, William Gordon
Energy Renewable Energy

An industry gaining pace 8 min read

Transmission line procurement, port development and a new offshore wind body were just some of the announcements in the Victorian Government's Offshore Wind Implementation Statement, issued on 21 October 2022.

These announcements, along with the Federal Government's $1.5 billion in concessional funding for Renewable Energy Zone (REZ) projects and minor amendments to the Offshore Electricity Infrastructure Act 2021 (Cth) (OEI Act), reflect the increasing pace of the Australian offshore wind industry. Reinforcing this pace is the release today of regulations supporting the OEI Act (we will provide further commentary on the key changes since the exposure drafts in our next update). 

In this Insight, we briefly provide some key updates for the offshore wind sector that you should know about, including the Victorian Government's recent announcements in the Offshore Wind Implementation Statement, the Federal Government's 'Rewiring the Nation' plan, and important amendments to the OEI Act.

Key takeaways

  • VicGrid will lead the procurement of transmission infrastructure from the Latrobe Valley to the Gippsland Coast and in Portland to support the offshore wind industry in those areas, while the Port of Hastings has been earmarked for substantial upgrades.
  • The Federal Government has agreed to make available $1.5 billion in concessional funding to REZ projects in Victoria, including for offshore wind projects.
  • Australia's net-zero commitments will now be considered when declaring areas for offshore wind developments, and the customs regime for the offshore wind industry will be aligned with other sea and resources installations.

Who in your organisation needs to know about this?

Business development teams, legal teams and board members of offshore wind project developers, as well as investors and key stakeholders who are interested in understanding potential regulatory approaches to the OEI Act.


The OEI Act regulates Australia's offshore wind industry. With Gippsland (off the coast of Victoria) recently being announced as a proposed declared area, significant announcements being made by developers and substantial government support being declared, the pace of change for offshore wind in Australia is increasing.


Figure 1. Australia's offshore industry will now include both oil/gas areas and offshore wind areas. There are also many major energy users located close to the coast which may be able to utilise connection into offshore wind farms.

1. Offshore Wind Implementation Statement

As part of the continuing development of a Victorian approach to supporting the offshore wind industry, the state government has released its 'Implementation Statement 1', which has provided some clarity about the direction taken for transmission solutions and ports, however it leaves some questions unanswered.1

Approach to transmission

One of the most significant challenges that developers face for offshore wind projects is the complexity of the transmission solution required to connect their project into the National Electricity Market. The Implementation Statement looks to address one piece of this puzzle, announcing that VicGrid will work with AEMO to procure a connection point for offshore wind project on the coast of Gippsland and in Portland.

The scoping process for routes will commence in 2023 with a competitive tender process expected to follow in 2024 for the development of a 500kV double circuit transmission line and terminal station in Gippsland, and an upgraded terminal station in Portland. The transmission infrastructure is planned to accommodate up to 2.5GW of generation capacity in both locations in line with the Victorian Government's renewable energy commitments (albeit well below the estimated resource capacity of the two areas).

Development of ports

Given the significant logistical and technical challenges involved in the construction of offshore wind projects, access to a purpose-developed port will be critical in the development of these projects. The Victorian Government has announced that the state-owned Port of Hastings has been identified for redevelopment to enable construction activities to occur there, with community consultation occurring in late 2022. The Implementation Statement suggests that this work could be completed by 2027 (with certain essential works potentially being completed earlier) in line with the state's offshore wind targets identified in the earlier Policy Direction Paper.2

Next steps

Despite these announcements, there are still significant legislative and regulatory issues at a state level to be worked through which will be confirmed in early 2023. For example, the method and degree to which regulatory alignment between the state and federal legislative regimes seamlessly accommodate transmission infrastructure remains to be seen. Nonetheless, the announcement of a new Offshore Wind Office in Victoria is a promising indication of the continued, long-term focus that is being applied to the industry.

The Victorian Government will release Implementation Statement 2 in early 2023, which will provide further information on:

  • offshore wind procurement and support mechanism;
  • local content requirements;
  • updates on policy and regulatory developments; and
  • updates on transmission solutions and ports.

Implementation Statement 3, which is expected in late 2023, will consider:

  • further details of the procurement process plan; and
  • updates on local content requirements.

2. Rewiring the Nation

The Federal Government has also announced an agreement with the Victorian Government to fast-track the development of critical transmission infrastructure to broadly support the shift to renewable generation in the state.3 As part of the announcement, $1.5 billion in concessional funding will be made available to REZ projects, including to the offshore wind industry.

Part of the agreement was a commitment to coordinate the relevant regulatory processes between the two governments, which presumably will attempt to deal with the current electricity legislation interface risks being faced by stakeholders. While the nature of how this funding will be applied and the regulatory solutions identified is yet to be seen, we consider this to be another indication of the significant governmental support being applied to the renewables sector.

3. OEI Act Legislative amendments

As part of the development of the offshore wind regime, the Federal Government has also recently enacted a legislative amendment to the OEI Act and proposed a further suite of changes.

Net-zero commitments

The Federal Government has legislated Australia's net-zero commitments through the Climate Change Act 2022 (Cth) and Climate Change (Consequential Amendments) Act 2022 (Cth). Read more about the broader impact of this legislation in our Insight: Legislating net zero - the key implications of Australia’s Climate Change Act.

The effect of this change on the OEI Act is that the Minister can now consider Australia's greenhouse emissions reduction targets when deciding to declare, vary or revoke a 'Declared Area' under the OEI Act. This additional consideration does not specifically extend to the decision-making process of individual applications. It is intended that the Minister should recognise the potential role that offshore renewable energy can play in meeting Australia's targets. Importantly, these amendments are not intended to prevent the export of renewable energy outside of Australia or require an adverse decision where export of renewable energy outside of Australia is proposed. The amendments may further incentivise declaration of areas as suitable for offshore renewable energy infrastructure.

Customs and administrative amendments

The Federal Government also released the Offshore Electricity Infrastructure Legislation Amendment Bill 2022 (the Amendment Bill) on 28 September 2022. There is currently no planned consultation for this bill which, if passed, will make amendments to the customs regime applying to offshore infrastructure and ensure the offshore wind regulatory regime can effectively operate.

Customs amendments

Once passed, the Amendment Bill will modify Australia's customs legislation to enable the Australian Border Force to deal with offshore electricity infrastructure in the same manner as other sea and resources installations. This includes obtaining permission from the Comptroller-General of Customs prior to the installation of an overseas offshore electricity installation.4 This refers to offshore infrastructure, a structure or an installation for the purposes of the OEI Act that has been directly imported from overseas and then installed without first reaching Australia.

One purpose of this proposed amendment is to enable border security risks (such as biosecurity risks) to be addressed prior to such infrastructure being installed. Further, the Anti-Dumping Commission will be empowered to deal with this infrastructure for anti-dumping purposes. The purpose of anti-dumping regulations is to control the import of products that are priced below the amount usually charged in the country of manufacture that has a negative impact on Australian industry.

In practice, it is unlikely that any of these changes will impact the development timeline for offshore wind projects in Australia. Instead, we expect that these changes will align the offshore wind industry to the oil and gas industry's customs regime.

Administrative amendments

The other set of changes that are intended to be brought in by the Amendment Bill rectify a technical issue in the appointment and powers of the Offshore Infrastructure Registrar and make other minor changes to the operation and regulation-making powers under the OEI Act.5

The OEI Act had originally contemplated a certain departmental structure, including where the National Offshore Petroleum Titles Administrator (NOPTA) sits. This structure has changed since the last federal election and a technical amendment is proposed to the OEI Act to reflect this change. While this change is unlikely to impact stakeholders (and does not change the regulator), it is nonetheless an important structural amendment to ensure the effective operation of the OEI Act.

Other changes proposed by the Amendment Bill include the:

  • power to make regulations to exclude certain offshore infrastructure, structures or installations from the operation of the OEI Act as the industry develops;6
  • provision for the Offshore Infrastructure Regulator to assess and provide feedback on the design of offshore renewable energy infrastructure and transmission infrastructure;7
  • option for the Regulator to publish plans submitted under a licence or management plans to its website in summary format for the purposes of public consultation or for transparency;8
  • ability to make regulations requiring licence holders to give notice to the Regulator in relation to the commencement and completion of certain offshore infrastructure activities;9
  • appointment of the Minister, rather than the Regulator, as the entity empowered to make decisions with respect to the forms and amounts of financial security licence holders must provide;10 and
  • provide for the Offshore Infrastructure Registrar to be an SES public servant in any Department of State of the Commonwealth (rather than only in the department responsible from time to time for administering the OEI Act). This is because, after a Machinery of Government change, NOPTA is part of a Department of State that does not administer the OEI Act.

Next steps

While the announcements and legislative updates discussed signal the continued growth of the offshore wind sector in Australia, they do not yet provide a complete picture of how the industry will be regulated and supported going forward.

Upcoming developments include the finalisation of the regulations supporting the OEI Act (including with respect to financial security requirements), the formal declaration of Gippsland as an offshore wind area and the development of other states' offshore wind policies.

We will consider the impact and key takeaways from the newly released regulations supporting the OEI Act in our next update. For more information on this, and to stay on top of these updates as they are announced, subscribe to receive our insights. If you have further questions or anything you would like to discuss, please reach out to our team listed below.

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