Seadragon challenges offshore wind licensing decision
In the first court case to test the new Federal legislative licensing regime for the offshore wind sector, Flotation Energy’s subsidiary, Seadragon Offshore Wind Pty Ltd (Seadragon), took the Minister for Climate Change and Energy to the Federal Court.[1] Seadragon challenged the minster’s decision on its feasibility licence application for an offshore wind farm in the Gippsland declared area. The issue for the court was whether the minister had the power to grant Seadragon a licence over a reduced area than was originally applied for.[2]
A feasibility licence authorises the licence holder to construct, install, commission, operate, maintain and decommission offshore renewable energy infrastructure in the licence area, so long as the legislative requirements are met.
The minister indicated to Seadragon that a feasibility licence wouldn’t be granted, as the area it had applied for overlapped with another licence application of greater merit. Seadragon requested the minister grant the licence on a reduced area that didn’t include the overlap. The minister rejected the amended request because he considered a feasibility licence could only be granted over the entire proposed area. He believed section 33(1) of the Offshore Electricity Infrastructure Act 2021 (Cth) (the OEI Act) didn’t permit him to grant Seadragon a licence over a reduced area.
The court’s decision turned on the minister’s interpretation of section 33(1) of the OEI Act.
The court found the minister made an error of law, as he did, in fact, have the power to grant Seadragon a licence over a reduced area. According to the court, the correct interpretation of s33(1) and whether it confers a power on the minster to grant a feasibility licence over a reduced area is that ‘s 33(1) extends to ‘an area’ – any area – which meets those requirements. A reduced area is still ‘an area’.’[3]
As such, the decision was remitted to the minister for reconsideration in accordance with the law.
Interestingly, as Justice Perram noted in his judgement, the associated Offshore Electricity Infrastructure Regulations 2022 (Cth) extensively cover how overlapping applications ought to be handled and how licence areas may be varied. However, they only address overlapping applications of ‘equal merit’ and don’t address the specific situation that occurred for Seadragon. It wasn’t in dispute that the applications in question were not of equal merit.[4]
The minister relied on the High Court precedent that ‘it may be useful to read together the regulations and the Act under which they were made in order to identify the nature of the legislative scheme which they comprise’.[5] However, the Federal Court found that in this case, it’s only s 33(1)(f) that would be relevant in this construction, and ‘it is not permissible to construe s 33(1) by reference to the contents of the licensing scheme…(because) the licensing scheme does not deal with overlapping claims which are not of equal merit’[6]
Perhaps a more pertinent question is how the minister will deal with issues of overlapping applications in the future, and whether the licensing scheme is sufficiently transparent and effective in guiding the minister’s future decisions.
As renewable energy regulations continue to evolve, we will explore the updated NSW Renewable Energy Framework in our next article.
[1] Seadragon Offshore Wind Pty Ltd v Minister for Climate Change and Energy [2024] FCA 1290.
[2] Ibid [35-36].
[3] Ibid [36].
[4] Ibid [7].
[5] Master Education Services Pty Ltd v Ketchell [2008] HCA 38; 236 CLR 101 at 110 [19].
[6] Seadragon Offshore Wind Pty Ltd v Minister for Climate Change and Energy [2024] FCA 1290 [46-48].
