The Offshore Electricity Infrastructure (Regulatory Levies) Act 2021 is a new piece of legislation that introduces a mandatory offshore electricity infrastructure levy. This levy is imposed on all holders of offshore electricity infrastructure licences and any person engaging in prescribed offshore infrastructure activities. The primary purpose of the Act is to establish a legal basis for cost recovery by the Commonwealth for its regulatory and compliance functions. The specific amount of the levy and the method of calculation will be determined by future regulations. The most significant practical consequence is the introduction of a new, ongoing financial liability for all of our offshore electricity projects, which will impact project budgets and financial modelling.
This update most significantly impacts offshore electricity infrastructure licence holders and entities engaging in offshore infrastructure activities, creating new financial and compliance obligations for these parties.
ProvisionChangeImpact on OperationsSection 8: Imposition of levyNew provision. The Act formally imposes a levy on offshore electricity infrastructure licence holders and those engaging in prescribed activities. It allows for different kinds of levies related to the licence duration or specific regulatory actions.This creates a new, direct financial liability for all relevant projects. Operational and project budgets must be updated to account for this cost. The levy applies for the duration of a licence, establishing it as a recurring operational expense.Section 9: Amount of levyNew provision. The Act stipulates that the amount of the levy will not be detailed in the Act itself, but will be prescribed in, or calculated according to, methods detailed in subsequent regulations.The full financial impact on operations remains uncertain until the supporting regulations are published. This requires flexible financial planning and introduces a new variable cost risk to project forecasting and profitability assessments.Section 10: RegulationsNew provision. This section grants the Governor-General the power to create regulations to implement the Act's provisions.This confirms that all critical operational details (e.g., levy amount, payment schedules, specific activities subject to the levy) will be contained in subordinate legislation. This requires ongoing regulatory monitoring to ensure compliance....
