Overview of the offshore renewable energy regime

Infographic showing an overview of the regulatory regime for offshore renewable energy.

The legislation is designed to:

• give developers greater certainty to invest.
• allow the selection of developments that best meet New Zealand’s national interests.
• manage the risks to the Crown and the public from offshore renewable energy developments.

The regime covers all forms of offshore renewable energy. Offshore wind is the most developed technology.

Indicative offshore wind project timeline

Feasibility – 7 years

Commercial – 40 years (construction – 3-5 years, operation 20-35 years, decommissioning)

Offshore renewable energy projects will require 2 permits

1. Feasibility permits will give greater confidence to developers to invest in feasibility activities

Feasibility permit:

• 7-year duration.
• Provides for the permit holder to assess the feasibility of an offshore renewable energy development that the permit holder proposes to carry out in the permit area.
• Applications are assessed against other applications.
• Gives the permit holder the exclusive right to apply for a commercial permit in the relevant area.

Minister launches application round:

• Minister for Energy will set the terms of the application round, e.g. technology and region.
• Ministers for Energy and Resources may restrict seabed mining permits in areas relating to the round.
• Developer identifies proposed site and consults with iwi/hapū before applying for a feasibility permit.

Regulator (MBIE) assesses applications. Regulator:

• Notifies public of proposed developments and opens public submissions.
• Consults with relevant Māori groups.
• Assesses applications.

Minister determines whether to award a feasibility permit:

• Regulator provides advice to Minister.
• Minster grants or declines permit.
• Permit holder must comply with permit conditions are other legislative requirements.

2. Commercial permits (alongside consents) enable construction and operation of offshore renewable developments

Commercial permit:

• Up to 40-year duration.
• Feasibility permit holders can apply when ready.
• Enables construction and operation of offshore renewable energy infrastructure (alongside resource and marine consents).

Developer applies:

• Consults Transpower New Zealand Limited, the Electricity Authority, and relevant Māori groups.
• Applies before feasibility permit expiry.
• Applies for a reasonably sized area, considering the planned development.

Regulator (MBIE) assesses application. Regulator:

• Consults with relevant Māori groups.
• Notifies public of proposed developments and opens public submissions.
• Assesses application.

Minister determines award of commercial permit:

• Regulator makes recommendation to Minister.
• Minister grants or declines permit.
• Permit holder must comply with permit conditions and other legislative requirements, including decommissioning.

Costs will be recovered

The regulator will recover the costs of administering the regime through fees and levies.

The government will not collect royalties, as this would deter investment and the costs would flow through to consumers.

Permits may be changed

• Permits may be varied, transferred, and surrendered, with agreement from the Minister.
• The Minister may also agree to a change of permit holder.

Compliance will be enforced

• A range of offences or penalties apply for breaches of the legislation or permit conditions. The Minister can revoke permits in the case of serious breaches.

Decommissioning

• Decommissioning obligations apply to generation and transmission infrastructure.
• Financial security will be required to cover full decommissioning costs.
• Financial security may be built up to reflect key risk periods ie construction and towards the end of asset life,Trailing liability will be limited to the previous permit holder. It will continue until financial security has fully accrued, or the Minister for Energy agrees to release the obligation.

Safety zones

Safety zones can restrict access or activities around offshore renewable energy infrastructure to protect people, vessels and infrastructure.

Projects will also require environmental (and other) approvals

Developers will need:

• Resource consents under the Planning Act 2026[KH6] [CH7] , e.g. for transmission cables running through the territorial sea and onshore infrastructure
• Marine consents under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 for activities in the EEZ, e.g. for turbines
• Other relevant approvals, e.g. under the Overseas Investment Act 2005 and Maritime Transport Act 1994.

Offshore renewable energy projects will only be eligible for environmental consents, including through the fast-track approvals process, if they hold a feasibility or commercial permit. 

This diagram shows the stages of an offshore renewable energy project

1. Feasibility

The feasibility stage is an opportunity to determine whether an offshore renewable energy project is feasible. Determining this involves gathering all the information necessary to assess whether a project is technically, commercially, environmentally, culturally and socially viable.

2. Construction

Constructing offshore renewable energy infrastructure can cost hundreds of millions of dollars and take several years. There are a series of activities that take place to prepare the site, manufacture the components needed and construct the infrastructure.

3. Operation and maintenance

Offshore renewable energy infrastructure can be in operation for decades. It needs frequent maintenance and inspections to check that components are working efficiently. Ongoing compliance with health and safety and environmental regulation will be a large part of the activities at this stage.

4. Decommissioning

Components, for example, wind turbines, will need to be decommissioned at the end of their useful economic lives.