Offshore wind fees slashed to counter global headwinds
Jennifer Dudley-Nicholson |
Hundreds of thousands of dollars will be cut from licence and application fees for offshore wind projects in Australia as the industry struggles to establish itself amid global headwinds.
The federal government on Tuesday announced a series of temporary cuts to offshore wind fees and levies, including slashing one licence application fee from $300,000 to $20,000.
Climate experts welcomed the move but said the projects were still substantial financial investments and international firms faced challenges from rising infrastructure costs and changing policies overseas.
The government’s announcement comes days after developers paused work on an $8 billion offshore wind farm proposed for Victorian waters, and following the collapse of another two Australian projects.
Australia has six dedicated offshore wind zones off NSW, Victoria, Western Australia and Tasmania, but no offshore wind farms in operation.
The cuts to project fees would continue for two years, Energy Minister Chris Bowen said, and were recognition that added expenses could prevent investments in Australia at a challenging time.
“These cuts to fees, capital requirements and red tape make Australia a better prospect for investment and regional job creation,” he said.
“We recognise that the industry currently faces economic pressures and we are acting accordingly with temporary relief.”
Under the changes, annual levies for transmission and infrastructure licences will be halved, levies for feasibility, research and demonstration licences will be waived, and application fees will be reduced.
Simpler financial and reporting requirements will also be introduced to ease the administrative burden associated with projects, Mr Bowen said, but community engagement requirements would remain the same.
The announcement comes after developers paused work on the Navigator North offshore wind project proposed for Gippsland, Victoria, last week.
Two major offshore wind projects proposed for Australia were also abandoned in recent weeks, including the $10 billion Novocastrian Offshore Wind Farm planned for Newcastle and backed by Norwegian firm Equinor.
Offshore wind projects typically cost billions of dollars and more than a decade to research and build, Climate Energy Finance director Tim Buckley said, and reducing government fees associated with their development could help their prospects.
“Anything the federal government can do to reduce the cost of the evaluation and holding period through to award is a sensible move in my view,” he said.
“They need to welcome proponents to spend a lot of money in developing feasibility and licence proposals.”
Investments in offshore wind projects were also suffering from policy uncertainty in other countries, Mr Buckley said, with the US government’s decision to withdraw approval for a Rhode Island wind farm that was 80 per cent built causing concern.
“Offshore wind has become exceptionally hard globally,” Mr Buckley told AAP.
“We have a global reassessment of offshore wind in all markets except for China.”
Offshore wind projects in development for Australian waters could deliver 24.21 gigawatts of energy, though they are not expected to operate until after 2030.
AAP
