Summary
The Coalition supports conditional improvements to the Offshore Electricity Infrastructure Legislation which the Coalition first introduced in 2021.
The Offshore Electricity Infrastructure Act 2021 established a legal framework to enable the construction, installation, commissioning, operation, maintenance and decommissioning of offshore electricity infrastructure in the Commonwealth’s offshore area.
The Coalition believes the short reporting timeframe of the Senate Committee did not allow proper engagement with communities most affected by the development of offshore energy projects.
The Coalition believes it important to have transparency around each financial security deal for an offshore wind turbine project approved by the Minister.
The Coalition does not believe the power to decide the form and amount of financial security licence holders must provide and when these obligations must cease should be transferred from the Regulator to the Minister for Climate Change and Energy.
The Coalition considers it necessary for any major energy project to attain a workable social licence. It is concerned the transfer of power to determine the financial security to be provided by a project to the Minister for Climate Change and Energy could be used to bypass proper local community consultation.
The Coalition believes there is a need for appropriate environmental considerations and approvals for all new offshore projects to properly protect bird and sea life in its vicinity.
Consultation
Offshore wind farm projects could provide Australia with new investment and jobs growth, particularly in coastal regional communities.
It is important to ensure potential projects do not negatively impact the regional communities which have been identified and declared as suitable for offshore renewable energy infrastructure.
The Coalition is concerned that the tight committee timeframe has limited the scope of the consultation and has reduced the capacity of concerned stakeholders and communities to respond appropriately.
Stakeholders such as the No Turbine Action Group Tasmania have expressed serious concerns about the broader implications of the legislation.
Social Licence and Financial Security
The Coalition believes the transfer of decision-making powers from the regulator to the Minister will reduce transparency around the approvals process for major offshore energy projects.
Considering the importance of securing a social licence from impacted communities for major projects, the Coalition is concerned that less Government oversight will make it difficult for a workable social licence to be sought from local communities.
The Coalition believes the lack of transparency could result in projects being approved without proper consideration of financial security considerations surrounding the full lifecycle of a project.
It is possible that less transparency, reduced government oversight and the Government’s rush to greenlight renewable energy projects to meet its own climate targets will result in the genuine concerns of communities being overlooked.
If offshore wind energy projects are fast-tracked without proper consideration of the financial security required there is a risk that funds for the rehabilitation of the site at the end of the asset’s life may not be sufficient.
A key part of the original legislation was community consultation, and by association gaining a social license, before an area could be declared as suitable for such offshore energy projects.
The Coalition is concerned that the Government’s amendment could be the first of many alterations to current legislation that remove important conditions which provide the community the right to procedural fairness.
The former Coalition government originally included a minimum 60-day public consultation period on a declared offshore energy zone to ensure local people can provide feedback on a proposed project.
The Coalition notes the Minister for Climate Change and Energy has demonstrated a failure to appreciate the importance of attaining a social license for major renewable and related infrastructure projects and notes that this sets renewables up for failure, not success.
To enhance the social license of a project, the Coalition believes it is important to maximise local content in procurement which will deliver job opportunities and community initiatives from regional energy infrastructure projects.
Environmental Consideration
Careful and ongoing consultation in regulating offshore electricity infrastructure is critical, given the deep connection Australians have with the ocean and existing offshore industries.
It is vital to manage the marine environment in a way that recognises all users including local communities and recreational users.
The Coalition notes the importance of product stewardship and the need for improved solutions for waste management and landfill, including in identified onshore and offshore renewable energy zones.
The Coalition notes a lack of financial security could result in offshore wind turbines, that have an operating life of around 20 years, becoming stranded assets without the capacity to suitably fund decommissioning to restore the area to its original state.
In 2018 for example an Oceanlinx wave energy generator was submerged in the ocean off Carrickalinga in South Adelaide while being towed. The company went into receivership shortly after with insufficient funds available to remove the asset. The stranded generator is now permanently stuck at sea and has become a well-known eyesore to the community and a hazard to local fishers.
Conclusion
The Coalition continues to hold concerns around social licence, environmental factors and financial security due to the short consultation process. However, it is recommended that the Committee continue the Coalition’s legacy of supporting the development of the Offshore Electricity sector by passing the changes to the Offshore Electricity Infrastructure Amendment Bill 2022.
Senator Ross Cadell
Committee Member