Commonwealth · Medium urgency

Offshore Electricity Infrastructure Regulations 2021

Significant temporary cost reductions are now available for offshore energy projects, lowering the barrier to entry. The government has slashed application fees and waived levies for a limited period to stimulate investment. This provides immediate cash flow relief and, crucially, adds regulatory certainty for green hydrogen infrastructure, de-risking projects in this high-growth sector.

Executive summary of update

This update introduces significant, temporary financial relief measures to stimulate investment in the offshore electricity sector. Key changes include substantial reductions in application fees for research, demonstration, and transmission licences for a 24-month period. The update also remits (waives) offshore electricity infrastructure levies for both existing and new feasibility, research, and transmission licences granted before mid-2027. This provides immediate cost savings and reduces financial uncertainty for early-stage projects. Furthermore, the regulations now explicitly define infrastructure for producing and transporting green hydrogen and related chemicals as ‘offshore renewable energy infrastructure’. This provides crucial regulatory certainty for projects focused on these emerging energy products, clarifying their legal standing and encouraging investment. The primary consequence is a significant lowering of financial barriers for project development in the short to medium term.

Impacted parties

Project proponents, particularly those in early-stage development, planning transmission infrastructure, or pursuing green hydrogen projects, are the most significantly impacted by this update.

Change Analysis

Temporary Financial Relief for Licence Applicants and Holders

The update introduces several measures aimed at reducing the financial burden on project proponents, particularly in the early stages of development.

Application Fee Reductions: Section 146 has been amended to introduce temporary fee reductions for applications made within 24 months from 15 November 2025. The fee for a research and demonstration licence is reduced from $300,000 to $20,000, and the fee for a transmission and infrastructure licence is reduced from $300,000 to $150,000.
Remittal of Past and Future Levies: The new Section 150A remits all unpaid levies for existing feasibility licences for periods that began before 15 November 2025, and also remits the levy for the next 12-month period. The new Section 150B provides forward-looking relief for licences granted on or before 30 June 2027, remitting the full levy for the first two years for feasibility and research/demonstration licences, and half the levy for the first two years for transmission and infrastructure licences.

Note: These changes are designed to incentivise new applications and support the financial viability of existing early-stage projects.

Expanded Definition of Offshore Renewable Energy Infrastructure

The update provides critical clarification on the scope of regulated infrastructure, particularly for the green hydrogen industry.

Inclusion of Green Hydrogen Infrastructure: The new Section 159A expands the definition of ‘offshore renewable energy infrastructure’ for the purposes of the Act. It now explicitly includes fixed or tethered infrastructure with the primary purpose of generating, storing, transmitting, or conveying ammonia, hydrogen, kerosene, or methanol.

Note: This change provides regulatory certainty for projects focused on producing green hydrogen and its derivatives, confirming they fall under the offshore electricity infrastructure framework. This is a significant de-risking event for investments in this technology.

Corrective and preventive actions

Finance

Section 146, 150A, 150B: Update all financial models and budget forecasts for current and prospective projects to reflect the reduced application fees and temporary levy remittals.
Section 150A: Identify any feasibility licences with outstanding levy payments, confirm with the Registrar that these liabilities are remitted, and adjust financial statements accordingly.
Section 150B: For all projects targeting a licence grant before 30 June 2027, ensure budget forecasts correctly apply the two-year levy remittal (or 50% remittal for transmission licences).

Project Management

Section 146: For any planned research, demonstration, or transmission licence applications, assess the feasibility of accelerating submission to ensure it occurs within the 24-month fee reduction window.
Section 159A: Review the scope of all prospective projects, particularly those involving green hydrogen or ammonia, to assess new opportunities now that regulatory coverage is explicit.

Government & Regulatory Affairs

Section 146, 150A, 150B: Liaise with the Registrar and Regulator to confirm the administrative procedures for applying the fee reductions and levy remittals to ensure compliance and correct application.
Section 159A: Update all internal guidance documents and external stakeholder communications to reflect the expanded definition of offshore renewable energy infrastructure.

Legal

Section 159A: Advise project and engineering teams on the legal and compliance implications of the expanded infrastructure definition for current and future project designs.
Section 166: Confirm the application date for the new definition in Section 159A and advise relevant project teams to ensure licence applications submitted on or after 15 November 2025 are compliant.

Risks & opportunities assessment

Opportunities

The temporary financial relief measures significantly lower the barrier to entry for new projects and improve the cash flow of existing ones. This creates a strategic opportunity to accelerate the development of our project pipeline and secure licences at a substantially lower upfront cost. The explicit inclusion of green hydrogen infrastructure under Section 159A provides significant regulatory certainty, de-risking investment in this high-growth area and positioning Simpoli to become a market leader. This clarity may also unlock new financing and partnership opportunities for such projects.

Risks

The financial relief measures are time-limited. There is a risk that projects not advanced enough to apply for a licence within the 24-month fee reduction window, or be granted a licence by the 30 June 2027 levy remittal deadline, will face a sudden increase in costs, potentially impacting their viability. This creates pressure to fast-track project milestones, which could introduce execution risks if not managed carefully. Over-reliance on these temporary subsidies without a clear path to long-term commercial viability could also pose a strategic risk.

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