Marine Renewable Energy in Australia: the urgent need for regulatory reform

Published in EcoGeneration, July/August 2012

Wave and tidal energy technologies offer the exciting prospect of generating electricity using the energy contained in the waters off our expansive coastline. Globally, marine renewable energy (MRE) technologies are rapidly developing and moving closer to commercialisation, while finance is beginning to flow as governments and large, well-established companies begin to invest in the industry.

Nonetheless, MRE faces a number of significant legal and regulatory barriers. Some jurisdictions have started addressing these barriers, though the sector is still some way from discerning a best practice. Australian states and territories, and the Federal Government, have been slow to engage with the issues, and developers face considerable hurdles in their attempts to get devices into the water and develop their projects.

There is currently no coherent and considered regulatory framework for the deployment of MRE devices in Australian waters. To date, developers have forged a process through ad hoc negotiation and discussion with local authorities and government departments. There is neither an established process, nor a department that acts as a first port of call for developers, whereas other countries, such as the UK, have established specific bodies to act as a ‘one stop shop’ for consenting.

The disparate nature of MRE regulation is perhaps in itself the greatest barrier to progress, as developers have had to deal with numerous bodies, seeking various reports and assurances, with little coordination. Obtaining consents for a project can take years and cost hundreds of thousands of dollars because developers have to provide a range of detailed surveys and reports and satisfy a number of statutes, regulatory regimes and authorities. Producing the necessary evidence has proven difficult as baseline data and experience are limited, given the immature nature of the technologies.

The stringency of these requirements has not been relaxed for small-scale prototype deployments, even though the environmental impacts of MRE technologies cannot be assessed properly unless they are deployed and monitored, and regardless of the fact that the emerging scientific opinion is that impacts are likely to be minimal and manageable.

In some jurisdictions, such as Scotland and Canada, governments have undertaken Strategic Environmental Assessments to balance development and sustainability by broadly identifying the likely interactions of MRE technologies with the marine environment and with other human uses of the oceans. Here, Australian developers shoulder the sole responsibility, which can be prohibitively expensive and time-consuming.

Aside from environmental consents, there is no standardised process exists for leasing the seabed or licensing the exploration and exploitation of the wave and tidal resource. State governments control the seabed up to 3 nautical miles from the shoreline, where MRE devices will generally be located and Victoria has moved first, producing a discussion paper on implementing a whole-of-government approach for MRE licensing and impact assessment. Unfortunately, this process appears to have stalled. The lack of licensing is in stark contrast to the offshore oil and gas industry, where there is a well-established system for licensing.

Not only does this make initial application for consent difficult and inconsistent, it will prove ever more problematic as the industry develops as there will be increased competition for limited suitable sites for MRE generation. Without a structured tendering or licensing process in place, there is a risk that speculation on wave and tidal sites will mean that the resource is not developed effectively and efficiently. Again, other jurisdictions have implemented tendering processes to ensure that only well-equipped and well-intentioned developers are able to access the resource.

These lengthy consenting processes impede development, particularly in the early proof of concept stages, and in some cases developments have collapsed entirely due to the capital required to meet consenting requirements. Effectively, early developers that blaze a trail for those that follow also have to foot the substantial bill.

As with other renewable energy sources, and like other countries, the best wave and tidal energy resources are somewhat distant from the existing electricity transmission networks, which generally grew up around coal basins. The high cost of new transmission infrastructure, coupled with the necessity of transitioning to renewables, suggests the need for changes to the National Electricity Rules to facilitate network augmentation. Unfortunately, the Australian Energy Market Commission has not implemented comprehensive proposals for ‘Scale Efficient Network Extensions’; an initiative that would have seen the cost of network upgrades distributed across all energy consumers, rather than being placed on one developer.

Finally, Australia has not developed a specific funding mechanism or any incentives for MRE development and does not have a site or centre for testing MRE devices. The Clean Energy Finance Corporation’s $10 billion fund may assist with some co-investment, but there is still a need for testing facilities, like the European Marine Energy Centre in Orkney, Scotland, which provides infrastructure for early device testing and works closely with licensing bodies to streamline the consenting and licensing process.

Australia has a world class wave and tidal resource that has the potential to provide a clean, renewable and uninterrupted electricity supply. Innovative Australian technology developers are playing their part in building a fledgling industry, but there is little regulatory and policy support. If Australia is to ensure that these companies stay, it is essential that we engage with the current barriers and develop regulatory and policy frameworks to facilitate the development of this industry.