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University of Otago Law Theses and Dissertations |
Last Updated: 13 April 2024
A Critical Analysis of the Current Framework for Regulating Offshore Wind Energy in New Zealand
Alessandra Monaghan
A dissertation submitted in partial fulfilment of the degree of Bachelor of Laws (Honours) at the University of Otago, Dunedin
October 2023
A Critical Analysis of the Current Framework for Regulating Offshore Wind Energy in New Zealand.
TABLE OF CONTENTS
Acknowledgements
I would like to thank –
Professor Nicola Wheen, for your encouragement, expertise, and invaluable guidance throughout this year.
Associate Professor Marcelo Rodriguez Ferrere, for your helpful comments and perspective on my topic.
My parents, for your wholehearted support and encouragement in everything that I do.
I Introduction and Background
1.1. Dissertation topic
It has been suggested that the complexity and uncertainty arising out of New Zealand’s current legal framework for regulating offshore renewable energy poses a key barrier to achieving New Zealand’s renewable energy goals.1 The New Zealand government has recently announced that it is in the process of developing a new regulatory framework for offshore renewable energy, however it remains unclear whether the framework will be a novel piece of legislation, maintain the status quo of the current regime or be some hybrid of the two.2
This dissertation will examine the operation of the existing consenting framework for regulating offshore wind development in New Zealand’s Exclusive Economic Zone (EEZ) and attempt to determine whether an appropriate balance is being struck between environmental protection and incentivising renewable energy development in pursuit of our climate goals. If the current framework fails to achieve this equilibrium, there may be a need for adjustments to the current framework, mirroring reforms undertaken overseas to align environmental safeguards with developmental incentives.
1.2. Background
The demand for energy in New Zealand has risen steadily in modern times and it is expected to keep climbing into the future. In the attempt to satisfy rising demand, New Zealand faces three significant challenges relating to energy production. First, there is the pressing need to provide secure and affordable energy to all New Zealanders. Second, there is the increasing necessity of mitigating the effects of climate change, by decreasing greenhouse gas emissions resulting from the production and consumption of energy. Finally, and perhaps most importantly, there is a need to treat our precious and unique natural environment responsibly.
New Zealand is currently a net importer of (primarily fossil fuel) energy, with our energy self- sufficiency reaching the lowest it has been since 1990 in 2021 and continuing to trend downwards.3 In 2021, emissions from energy made up 40 per cent of our total gross emissions and coal imports reached
1 Ministry of Business, Innovation and Employment (MBIE) Enabling Investment in Offshore Renewable Energy Discussion Document (December 2022).
2 Ministry of Business, Innovation & Employment Developing a Regulatory Framework for Offshore Renewable Energy: Second Discussion Document (August 2023) at 40.
3 Ministry of Business, Innovation and Employment “Energy in New Zealand 2023” (August 2023) at 3.
a record high of 1.8m tonnes.4 Changes to this status quo are required if we are to create a sustainable energy system for future generations. There is no doubt that renewable energy plays a key part in overcoming these challenges by providing a clean and infinite source of energy. Reflecting this sentiment, our government has reiterated their strategic goal that by 2030, 100 per cent of the electricity generated in New Zealand will come from renewable energy sources.5 Current Minister of Energy and Resources Hon. Dr. Megan Woods recently remarked that “achieving this will require the energy transition to be made in a way that keeps the lights on, keeps power bills affordable, and keeps our economy growing.6
New Zealand was among the first in the world to exploit several major forms of renewable energy.7 The principal renewable energy source in New Zealand has historically been hydroelectricity, with other sources such as geothermal also increasing their contribution in the later part of the 20th century.8 However, in recent times renewable energy development in New Zealand has significantly slowed.9 Public opposition to the noise, visual intrusion and land take of onshore wind farms has contributed to the stagnation of wind energy development on the mainland, whilst increasingly protective freshwater regulation has slowed hydroelectricity growth.10 In 2008, Meridian Energy proposed to build a hydroelectric dam on the Mokihinui River, which is part of the conservation estate.11 The initial approval of the application was successfully appealed to the Environment Court by a number of parties, including the Department of Conservation, which led to Meridian abandoning its plans for the hydroelectric dam.12 Meridian was also forced to abandon their plans to build the largest wind farm in the southern hemisphere in Central Otago, after a drawn out legal battle with environmental groups who were mainly
4 Ministry of Business, Innovation and Employment, above n 3, at 1.
5 Ministry of Business, Innovation and Employment “New Zealand Energy Strategy Terms of Reference” October 2022 at 1.
6 Megan Woods "Empowering Kiwis to have a say in the energy transition" (press release, 9 August 2023)
<www.beehive.govt.nz/release/empowering-kiwis-have-say-energy-transition>.
7 Geoff Kelly “History and Potential of Renewable Energy Development in New Zealand” (2011) 15 Renew. Sust. Energ. Rev. 2501 at 1.
8 At 2.
9 At 1.
10 At 4.2.
11Gavin Lister “Nature in the Sublime. Mokihinui” Isthmus <https://isthmus.co.nz/project/mokihinui/>
12 Parliamentary Commissioner for the Environment Hydroelectricity or Wild Rivers? Climate Change Versus Natural Heritage (May 2012) at 5.
concerned about the visual impact of the project.13 We tend to think of pressing environmental issues as a battle between the environment and the economy, however the issues surrounding renewable energy development in New Zealand illustrate that sometimes the conflict can be environment versus environment. Renewable energy is good for the environment because it allows electricity to be generated without emitting greenhouse gases. Avoiding the development of wild and scenic areas is clearly also good for the environment – these areas are a precious part of our environmental heritage and support New Zealand’s unique biodiversity.
Offshore renewable energy sources such as offshore wind power have the potential to sit more comfortably within New Zealand's current social and environmental policy settings. New Zealand’s offshore renewable energy potential is unparalleled, with world-class wind, wave and solar energy generation potential on our doorstep, and suitable seabed depths for offshore wind farms in certain areas off our coasts such as Taranaki and the Foveaux Strait.14 A question then arises, regarding how a nation with such abundant untapped offshore renewable energy potential remains so dependent on imported fossil fuels?
1.3. Map of Dissertation
Following Part I (this introduction), this dissertation falls into three substantive parts:
Part II: The Current Regulatory Framework
This dissertation begins with a brief informative background on offshore renewable energy and New Zealand’s unique position with regard to offshore generation potential. It then outlines the hypothetical case study that will be tested through the existing regulatory framework in later chapters; a large-scale offshore wind project in New Zealand’s EEZ. The justification for choosing this case study will also be provided. This is followed by an exploration of New Zealand’s current legal framework for regulating offshore renewable energy development in the EEZ, under the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012 (EEZ Act). The legislation itself, case law, commentary and reports will be utilised to explore the practical application of these frameworks.
13 Lynda van Kempen “Meridian Ditches Project Hayes” The Otago Daily Times (online ed, Central Otago, 2 February 2012).
14 Ministry of Business, Innovation and Employment, above n 1, at 5.
Part III: Analysis of the Current Regime
In this section the adequacy of the current regulatory framework is analysed in the context of fostering offshore wind development. The efficacy of the current regime with regard to environmental protection and incentivising renewable energy development is evaluated, and limitations of the current regime highlighted. These limitations primarily surround the regime’s complexity, lack of policy direction and the lack of certainty it provides for stakeholders. The overall aim of this part is to evaluate how well the existing framework strikes an appropriate balance between environmental protection and incentivising renewable energy development. Some of the ways in which the current regulatory framework inhibits offshore wind development will be found to be necessary, in particular the environmental safeguards contained in the EEZ Act. Whereas other barriers arising from the current regime will be found to be unnecessary roadblocks to meeting our renewable energy goals, as they merely serve to increase bureaucratic delays or lessen certainty for investors.
Part IV: Which Way Forward?
Finally, the focus will turn to overseas as the final part of this dissertation will examine the bespoke regulatory approaches taken in Denmark, Scotland and Australia. These countries have been specifically chosen for study because they have demonstrated success in cultivating a regulatory environment that is conducive to offshore development. Moreover, there exists a considerable body of research that critically evaluates the effectiveness and robustness of their respective frameworks, making them ideal candidates for comparison and analysis. This part will explore how well these frameworks adequately provide for the protection of environmental interests whilst promoting development, or if they are merely a mechanism to fast-track projects at the expense of the natural environment. This dissertation will then discuss whether a similar novel framework would be an appropriate way forward for New Zealand, considering both our current energy plight and our unique and precious biodiversity, among other relevant factors. Other possible avenues will also be explored that could be taken to make New Zealand’s current regulatory environment more favourable to offshore wind development, without the creation of a new bespoke framework.
II Case Study and The Current Regulatory Framework
2.1. The Case Study
The scope of this dissertation will be restricted to analysing the path that a hypothetical large-scale offshore wind project constructed in New Zealand’s EEZ would proceed through under the current regulatory framework. Although many of the issues raised in this dissertation will be applicable across all offshore renewable energy generation methods, the case study has been limited to offshore wind because it is the technology with the most realistic prospects of being established off New Zealand’s coast in the foreseeable future.15 This is due to the fact that the technology is far more advanced and established than other offshore generation technologies (such as wave or tidal generation) and due to the clear expression of interest from offshore developers in establishing offshore wind farms in New Zealand’s EEZ.16
It appears to be more likely that a large-scale wind project would be placed beyond the 12 nautical mile (NM) mark in New Zealand’s EEZ, rather than inside the coastal marine area (within 12 NM of the shoreline). This is due to a number of reasons, including the fact that in the EEZ, developers are less likely to encounter issues surrounding: interference with amenity value, uncertainty surrounding the Natural and Built Environments Act 2023 (NBEA) (the successor legislation to the Resource Management Act 1991 (RMA)) and overlapping existing interests (such as fisheries interests and shipping routes).17 Additionally, increasing the distance between the wind farm and the shoreline has been the general trend in overseas offshore wind development.18 This is due to better wind conditions and more open space, allowing for larger and more efficient projects. Large scale offshore wind farms that have been built overseas tend to be situated well beyond 12 NM from shore, an example being the Hornsea Wind Farm, a project consisting of 174 enormous turbines spaced out over 400 sq kilometres that was installed in the North Sea 120 km (75 NM) off the east coast of England.19
The installation of an offshore wind project within the coastal marine area would be regulated by the RMA, and such a topic would merit an independent and dedicated dissertation, especially given the
15 Ministry of Business, Innovation & Employment, above n 2, at 9.
16 At 6.
17 Dylan F. Jones and Graham Wall “An Extended Goal Programming Model for Site Selection in the Offshore Wind Farm Sector” (2016) 245 Ann. Oper. Res. 121 at 4.1.1.
18 H. Diaz and C. Guedes Soares “Review of the Current Status, Technology and Future Trends of Offshore Wind Farms” (2020) 209 Ocean Eng. 1073981 at 3.2.
19At 5.1.
uncertainties currently surrounding the resource management reforms in New Zealand. The NBEA has only recently been enacted in August 2023 and it could take up to a decade for it to be affecting decision- making on the ground.20 The RMA returned mixed results on renewable energy development projects – as previously noted the Mokihinui hydro-dam and Project Hayes wind farm proposals failed.
However, other projects have succeeded under the RMA, as was the case in Crest Energy Kaipara Ltd v Northland Regional Council.21 In 2011, Crest Energy obtained conditional consent to develop a 200 turbine tidal energy project in the Kaipara Harbour, located in the Northland region.22 Crest Energy sought resource consent to install and operate a series of underwater turbines to harness tidal energy in the harbour. However, the Northland Regional Council initially only granted consent for half of the turbines sought in Crest Energy’s application, which Crest Energy then successfully appealed. Crest Energy sheds some light on the application of the resource consenting framework under the RMA to renewable energy generation projects in the coastal marine area and will be referred to later on in this dissertation. The case dealt with a number of issues, including issues related to; sustainable management, the regional and national economy, impacts of offshore renewables on marine mammals, fisheries interests, Tikanga Māori, and the suitability of an adaptive management approach. However, the Kaipara tidal project has since been abandoned, with Crest allowing the consents to lapse in 2021.23
Furthermore, by the end of this year, 19 onshore wind farms will be operating in New Zealand.24 Proposals for three of these were “called in” by the Minister for the Environment.25 Section 142 of the RMA provides that a Minister may “call in” a matter that is or is part of a proposal of national significance.26 If the matter partly affects the coastal marine area, as would be the case with an offshore renewable energy proposal, this power would be jointly exercised by the Minister for the Environment and the Minister of Conservation.27 The Ministers must decide whether it is a proposal of national
20 Ezekiel Hudspith “The Natural and Built Environment Act is here – so now what?” (17 August 2023) Dentons- Kensington-Swan <https://www.dentons.co.nz/en/insights>.
21 Crest Energy Kaipara Ltd v Northland Regional Council [2009] NZEnvC.
22 At [1].
23 Anthony Doesburg “Plug pulled on tidal turbine projects” The New Zealand Herald (online ed, Auckland, 6 November 2013).
24 “The RMA Consent Process” New Zealand Wind Energy Association
<https://www.windenergy.org.nz/resources/for-developers-and-landowners/rma-consents>.
25 At [12]
26 Resource Management Act 1991, s 141.
27 Resource Management Act, s 148.
significance and, if it is, they refer it to either the Environment Court or a board of inquiry for decision.28 The NBEA contains similar provisions.29 It requires the Minister, when making a decision about whether or not to call in an application, to have regard to:30
a) whether the matter gives effect to the national planning framework:
b) the nature, scale, and significance of the proposal:
c) its potential to contribute to achieving framework outcomes for the environment and well- being:
d) whether there is evidence of widespread public concern or interest regarding its actual or potential effects on the environment:
e) whether it has the potential for significant or irreversible effects on the environment:
f) whether it affects the natural and built environments in more than 1 region:
g) whether it relates to a network utility operation affecting more than 1 district or region:
h) whether it affects or is likely to affect a structure, feature, place, or area of national significance, including in the coastal marine area:
j) whether it would assist in fulfilling New Zealand’s international obligations in relation to the global environment:k) whether by reason of complexity or otherwise it is more appropriately dealt with under this Part rather than by the normal processes under the Act:
It seems very likely that a large-scale renewable generation project in the coastal marine area within the 12 nm mark would be considered a project of national significance in terms of nearly all of the aforementioned factors. However, use of the call-in provisions is not a certainty and adds complexity to the legal regime that applies to proposals in the coastal marine area.
28 Section 142(2).
29 Natural and Built Environment Act 2023, sch 10 cl 55.
30 Schedule 10 cl 55(3).
A key barrier to wind development in the coastal marine area arises from the conflict between the New Zealand Coastal Policy Statement (NZCPS) and the National Policy Statement on Renewable Energy Generation (NPS-REG). Although created under the RMA, these two Policy Statements remain in operation under the newly-enacted NBEA. When granting consents decision-makers must “have regard to” any relevant national policy statement, and the Court of Appeal in RJ Davidson Family Trust v Marlborough District Council advised that caution should be taken in granting a resource consent that directly goes against any policy or objective in a national policy statement.31 The NPS-REG was issued in 2011 by the Minister for the Environment under the RMA, s 52(2).32 The NPS-REG was created to assist New Zealand in achieving the Government’s target of 90 per cent of electricity from renewable sources by 2025.
Generators believe that decision-makers will face difficulties in reconciling potentially conflicting policy recommendations from different national policy statements, such as the conflict that could arise between the NPS-REG and the NZCPS when it comes to renewable energy generation infrastructure in outstanding natural landscapes.33 There is a risk that councils might not prioritise the NPS-REG as highly as other national policy statements when making NBEA decisions, especially when evaluating mitigation strategies and setting conditions for consent (on the basis that King Salmon affirmed that provisions in higher level policies that are directive in nature are essentially environmental bottom lines that must be complied with), however this is not clear.34 This ambiguity in policy direction makes the likelihood of obtaining consent for renewable development projects in the coastal marine area more challenging. The inefficacy of the NPS-REG will be used to inform recommendations surrounding the creation of an EEZ policy statement later on in chapter four.
Although the legal issues surrounding the development of a wind farm in New Zealand’s coastal marine area warrant a separate dedicated dissertation, it is impossible to avoid discussing some of these in this dissertation despite its exclusive focus on an offshore wind project in the EEZ. This is due to submarine cabling being needed to join the wind farm to the national grid. This cabling will span the distance
31 RJ Davidson Family Trust v Marlborough District Council [2018] NZCA 316 at [304].
32 “National Policy Statement for Renewable Electricity Generation” (14 April 2011) New Zealand Gazette.
33 Ministry for the Environment Report of the Outcome Evaluation of the National Policy Statement for Renewable Electricity Generation (December 2016) at 51.
34 At 52.
between the offshore turbines to shore, traversing the coastal marine area. This substantially increases the complexity of the consenting process for EEZ projects and will be discussed in more length in Part III.
2.1.1. Hypothetical Offshore Wind Project in New Zealand’s EEZ
The scale of offshore renewable energy projects is somewhat difficult to fathom, they dwarf their onshore counterparts and require immense amounts of infrastructure and investment to get up and running. In these offshore projects, the electricity is harnessed by way of wind turbines that convert the kinetic energy of the wind into electrical energy. The turbines are placed in areas of open water, where there are little to no obstructions, so the wind currents are stronger and more consistent than on land, thus generating more energy.35
Offshore wind development is very capital cost-intensive. The initial financial investment comprises approximately three quarters of the total lifetime cost of the project.36 This is far higher than conventional power stations, where investment costs typically represent around 40 per cent of the lifetime cost of the project. Additionally, investment cost per megawatt in offshore wind is approximately 50 per cent more expensive than it would be for the same capacity wind project on land, due to the increased complexity of installation and the costs of additional underwater equipment and components.37 This means that securing startup capital is crucial to the viability and success of any offshore wind project.
2.1.2. Feasibility Assessment
Before construction can begin on an offshore wind development, a feasibility assessment must be undertaken.38 This stage involves selecting an appropriate site for development taking into account wind speed, sea depth, sea bed conditions and distance from shore.39 Before construction can begin,
35 Santiago Salvador and others “Streamlining the consent process for the implementation of offshore wind farms in Spain, considering existing regulations in leading European countries” 157 Ocean and Coastal Management 68 at 68.
36 Diaz and Soares, above n 18, at 3.
37 At 3.
38 Zhiya Jiang “Installation of Offshore Wind Turbines: A Technical Review” 139 Renew. Sustain. Energy Rev. 110576 at 1.
39 At 1.
developers would also need to secure all required environmental consents for the project, as will be discussed in more detail later on in this chapter. Assessing feasibility of an offshore wind project can be a substantial investment in itself for offshore wind developers.40
2.1.3. Installation
Many of the environmental effects stemming from offshore wind development occur during the installation phase of the project.41 The installation of fixed-bottom offshore wind turbines can be summarised in six main steps: (1) port logistics, (2) foundation installation, (3) transition piece installation, (4) turbine installation, (5) substation installation, and (6) cable-laying operations.42 Each turbine is 190m tall and is drilled around 35m into the seabed to ensure stability in rough seas.43 The initial drilling of these turbines into the sea floor requires the excavation of sand and other seafloor material, which would subsequently be discharged back into the surrounding ocean.44 The turbines are connected to neighbours by array cables buried in the seabed, which ultimately connect to an offshore substation.45 For large wind farms, several substations are used.46
The substation is then connected to the national grid on the mainland by kilometres of export cabling.47 In overseas examples, the offshore cables have been buried to protect them from fishing activities and anchors.48 Cable burial is usually done using one of three methods: trenching, burial and rock dumping.49 New Zealand’s Cook Strait Cables carry both electricity and telecommunications between the North and South Island.50 These cables are not buried but are protected via specially-created legislation: the
40 “How Much Does It Cost to Start an Offshore Wind Farm Feasibility Study and Launch?” FinModelsLab
<https://finmodelslab.com/blogs/startup-costs/offshore-wind-farm-feasibility-study-startup- costs#:~:text=In%20summary%2C%20the%20cost%20of,on%20the%20various%20factors%20involved.>. 41 O. Mauricio Hernandez C and others “Environmental impacts of offshore wind installation, operation and
maintenance, and decommissioning activities: A case study of Brazil” 144 Renew. Sust. Energ. Rev. 110994 at 4.
42 At 3.1.
43 At 3.2.2.
44 At 3.2.2.
45 At 3.2.6.
46 At 3.2.5.
47 At 3.2.6.
48 At 3.2.6.
49 Taormina Bastian and others “A review of potential impacts of submarine power cables on the marine environment: Knowledge gaps, recommendations and future directions” (2018) 96 Renew. Sust. Energ. Rev. 380 at 381.
50 Hope Miller “Cook Strait Submarine Cable Protection Zone” (February 2011) Transpower
<https://www.transpower.co.nz/cook-strait-cpz-cable-protection-zone>.
Submarine Cables and Pipelines Protection Act 1996. This Act, administered by the Ministry of Transport, creates protection zones around certain submarine cables in New Zealand waters. If the positive effects of the offshore wind farm submarine cables are strong enough to meet the Protection Standard, the area surrounding submarine cables can qualify for tier two marine protected area status under the Submarine Cables and Pipelines Protection Act 1996.51 This status means that anchoring and certain types of fishing operations would be prohibited within a certain proximity of the submarine cables.52
The fact that these cables will need to traverse both the EEZ and the coastal marine area on their journey to land significantly increases the complexity of the consenting process for an offshore wind farm in New Zealand. This will be discussed further in section 3.1.6 below.
2.1.4. Operation and Maintenance
The operation and maintenance stage of an offshore wind project is the productive phase of the development’s life cycle. The objective of this stage is to ensure electricity is being produced and made available at a satisfactory level and financial profits are maximised for stakeholders in the project.53
During its operational life, it is inevitable that the offshore wind installation will require maintenance. The maintenance required can be divided into two categories; regular preventative maintenance (such as lubricating and repainting) and corrective unplanned maintenance.54 The possibility of negative environmental effects arising from maintenance activities (for example, the risk of contaminants being accidentally discharged into the sea) is beyond the scope of this dissertation.
2.1.5. Decommissioning
Around fifty per cent of existing wind farms worldwide (including many offshore wind farms) will reach the end of their operational life by 2030.55 Once they have reached this point, every project must be
51 Submarine Cables and Pipelines Protection Act, s 12.
52 Section 13.
53 Hernandez and others, above n 41, at 3.3.
54 At 3.3.
55Aloys Nghiem and Iván Pineda “Wind energy in Europe: Scenarios for 2030” (September 2017) Wind Europe
<https://windeurope.org/wp-content/uploads/files/about-wind/reports/Wind-energy-in-Europe-Scenarios-for- 2030.pdf.>.
decommissioned and the onus is usually on the developer to restore the surrounding environment to its pre-development state.56 The process of removal of the turbines is likely to cause significant disruption to the marine environment, not to mention sizable costs.57 Due to the relative newness of the technology, only a few countries currently have any experience in decommissioning offshore wind projects, with only seven offshore wind farms that have been decommissioned globally to date.58
2.1.6. Environmental Drawbacks of Offshore Renewable Energy
Whilst offshore renewable energy generation could play a major part in the solution to our climate crisis, the projects are not without some glaring environmental drawbacks. Some of these drawbacks are not yet well understood due to the relative newness of the technology combined with the lack of baseline environmental data in the EEZ, such as potential effects on megafauna and other marine life.59
The first and most obvious environmental impact is the disruption and damage to the seafloor that results from the placement of turbines. The seafloor is a rich and vital part of the marine ecosystem, and disturbing the ocean floor can alter these deep-sea habitats. The initial drilling of the turbines into the sea floor will also uplift sediment that is then discharged out into the surrounding ocean, increasing turbidity and thus potentially decreasing productivity of ecosystems surrounding the offshore wind farm.60
Whilst installation is regarded as the most environmentally damaging stage of a wind farm’s life cycle, studies have shown that activities occurring during the operational and decommissioning stages also have the potential to cause significant environmental impact.61 Another environmental concern relates to the impact of these projects on marine life and birds. Wind turbines have been shown to displace birds and cause mortality when collisions occur.62 Noise pollution is another major concern. Wind turbines significantly contribute to noise pollution, transmitting low frequency vibrations through the water that
56 Benjamin Pakenham and others “A Review of Life Extension Strategies for Offshore Wind Farms Using Techno-Economic Assessments” (2021) 14 Energies 1936 at 1.
57 At 1.
58 Tosin Adedipe & Mahmood Shafiee “An economic assessment framework for decommissioning of offshore wind farms using a cost breakdown structure” (2021) 26 Int J LCA 344 at 1.
59 Crest Energy, above n 21, at [187].
60 Hernandez and others, above n 41, at 4.1.2.
61 At 4.
62 At 4.
have the potential to interfere with marine mammals behaviour, negatively impacting their location and communication abilities.63 The dangers of aquatic noise pollution from turbines (more specifically wave turbines) was discussed in Crest Energy, in which experts concluded that the extent of the impacts of noise pollution on marine life is not yet properly understood.64
2.2. Overview of EEZ Act
The EEZ Act regulates the environmental effects of seabed activities that occur in New Zealand’s EEZ. The EEZ Act applies between 12-200 NM out to sea and would apply to any offshore renewable energy development in this zone. Over the course of this dissertation, I will refer to a number of provisions in the EEZ Act. For ease of understanding, I will begin by briefly outlining the Act and setting out the key provisions relating to offshore renewable energy development.
2.2.1. Purpose
The purpose of the EEZ Act is laid out in s 10. When discussing offshore renewable energy development, both limbs of the purpose are relevant, that is: to promote the sustainable management of the natural resources of the EEZ and the continental shelf and to protect the environment from pollution by regulating or prohibiting the discharge of harmful substances and the dumping or incineration of waste or other matter.65 Sustainable management is defined in the Act as managing the use, development, and protection of natural resources in a way, or at a rate, that enables people to provide for their economic well-being while:66
(a) sustaining the potential of natural resources (excluding minerals) to meet the reasonably foreseeable needs of future generations; and
(b) safeguarding the life-supporting capacity of the environment; and
(c) avoiding, remedying, or mitigating any adverse effects of activities on the environment.
63 “Does Offshore Wind Affect Marine Life?” (16 June 2022) Sinay Maritime Data Solution
<https://sinay.ai/en/does-offshore-wind-affect-marine-life/>.
64 Crest Energy, above n 21, at [124].
65 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, s 10(1).
66 Section 10(2).
This definition largely adopts the definition of sustainable management from s 5(2) of the RMA. However, there are distinctions between the two Acts, these differences lie in the narrower focus of the EEZ Act on natural resources and the economic well-being of people.67
Trans-Tasman Resources Limited v The Taranaki-Whanganui Conservation Board is a landmark Supreme Court decision on a long-running legal battle surrounding Trans Tasman Resources Limited’s application for seabed mining consents under the EEZ Act.68 Whilst the case is set in the deep sea mining context, the Supreme Court’s judgment has far-reaching implications for all marine management in the EEZ (including offshore renewable development) and the Court clarified the correct approach to applying a number of key provisions in the EEZ Act.69 In Trans-Tasman Resources the Supreme Court took the view that “the large body of case law and understanding that has built up in relation to the interpretation of the RMA’s provisions cannot be applied uncritically to the different environment and statutory context of the exclusive economic zone and continental shelf”, and to employ discretion in interpreting the provisions of the EEZ Act.70 The court in Trans-Tasman Resources clarified that s 10(1)(b) creates an environmental bottom line that prohibits any discharge or dumping activity, where the environment cannot be protected through regulation from material harm arising from the activity.71
The EEZ Act’s provisions allow for continuation of the implementation of New Zealand’s international obligations in regard to the marine environment.72 The Act also recognises the Crown’s responsibility to give effect to the principles of the Treaty of Waitangi.73
2.2.2. The Consenting Regime
The EEZ Act’s consenting regime essentially revolves around the classification of proposed activities as permitted, discretionary or prohibited. The Act outlines the kinds of activities that fall under each classification.74 Permitted activities are able to be undertaken without a marine consent, as long as the
67 Trans-Tasman Resources v Taranaki-Whanganui Conservation Board [2021] NZSC 127 at [83].
68 At [1].
69 Elizabeth Macpherson and others “Trans-Tasman Resources v Taranaki-Whanganui Conservation Board [2021] NZSC 127: A New “High-Water Mark” for Seabed Mining” (2021) 25 NZ Int. J. Env. Law 277 at 277.
70 Trans-Tasman Resources, above n 67, at [78].
71 At [260].
72 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 11.
73 Section 12.
74 Sections 35(1), 36(1), 37(1).
specifications outlined in the regulations are complied with.75 Discretionary activities require a marine consent before they can be undertaken.76 Activities that are classified as prohibited cannot be undertaken in any circumstance, nor can consents be granted to permit them.77
The duties, restrictions and prohibitions that relate to activities occurring within the EEZ are set out in Part 2 of the Act. Section 20 outlines that the following activities may not be undertaken in the EEZ or on the continental shelf unless the activity is classified as a permitted activity or otherwise authorised by a marine consent or by s 21-23 (sections permitting the continuation of specific existing petroleum activities):78
(a) the construction, placement, alteration, extension, removal, or demolition of a structure on or under the seabed
(b) the construction, placement, alteration, extension, removal, or demolition of a submarine pipeline on or under the seabed
(c) the placement, alteration, extension, or removal of a submarine cable on or from the seabed
(d) the removal of non-living natural material from the seabed or subsoil
(e) the disturbance of the seabed or subsoil in a manner that is likely to have an adverse effect on the seabed or subsoil
(f) the deposit of any thing or organism in, on, or under the seabed
(g) the destruction, damage, or disturbance of the seabed or subsoil in a manner that is likely to have an adverse effect on marine species or their habitat
The construction of offshore wind infrastructure involves a number of the aforementioned activities, primarily the construction of a structure on the seabed and the placement of submarine cables on the seabed. Thus, an offshore wind farm would be classified as a discretionary activity under the EEZ Act and a marine consent would be required for any proposed offshore energy generation projects. An additional discharge consent would also be required for the excavation involved in turbine placement
75 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 35(2).
76 Section 36(2).
77 Sections 37(2)-(3).
78 Section 20.
and cable dredging and the decommissioning of any offshore project would require another round of consents.
2.2.3. Applications for consent
Applications for marine consents are lodged with the Environmental Protection Authority. Activities such as the construction of installations on the seabed will be considered by a Board of Inquiry, which is appointed by the Minister for the Environment in accordance with the Environmental Protection Authority Act 2011.79
In order to lodge an application for a marine consent, an impact assessment must be undertaken that is prepared in accordance with the requirements of section 39 of the Act.80 The impact assessment must describe both the activity and the current environmental state of the area.81 Potential effects of the proposed activity must also be identified, including but not limited to the effects on: the environment, biodiversity, vulnerable ecosystems and existing interests that may be adversely affected by the activity.82 The impact assessment must also specify any consultation undertaken with persons with adversely affected interest, and specify measures that could be taken to mitigate or avoid the adverse effects.83 It should also be noted that applications for activities to be undertaken in connection to the decommissioning of offshore installations used in connection to petroleum production must be accompanied by decommissioning plans that require approval from the EPA.84 The Act does not expressly mention a requirement to provide a plan for the decommissioning of other structures, but at a minimum offshore wind developers will need to provide in their application a description in general terms of how and when it is proposed that the structure and submarine cable will be dealt with at the end of its life.85
2.2.4. Consideration of Applications
79 Environmental Protection Authority Act 2011.
80 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 39.
81 Sections 39(1)(a)-(b).
82 Sections 39(1)(c)-(f).
83 Sections 39(1)(g)-(j).
84 Section 38(3).
85 Section 38(2)(d).
Consents for an offshore renewable energy project would be issued on a first-come first served basis under the current regime, as there is currently no tendering process provided in the Act to allow decision- makers to weigh the merits of competing applications. Section 59 outlines the factors that a decision maker must consider when choosing whether to grant a marine consent. These factors include (but are not limited to):86
The decision maker is also required to consider the extent to which imposing conditions under section 63 might avoid, remedy, or mitigate the adverse effects of the activity.87
‘Existing interests’ is defined in the Act as, in relation to New Zealand, the EEZ, or the continental shelf, the interest a person has in:88
a) any lawfully established existing activity, whether or not authorised by or under any legislation, including rights of access, navigation, and fishing:
b) any activity that may be undertaken under the authority of an existing marine consent granted under section 62:
c) any activity that may be undertaken under the authority of an existing resource consent granted under the Natural and Built Environment Act 2023:
d) the settlement of a historical claim under the Treaty of Waitangi Act 1975:
86 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 59(2).
87 Section 59.
88 Section 4.
e) the settlement of a contemporary claim under the Treaty of Waitangi as provided for in an Act, including the Treaty of Waitangi (Fisheries Claims) Settlement Act 1992:f) a protected customary right or customary marine title recognised under the Marine and Coastal Area (Takutai Moana) Act 2011
The Supreme Court in Trans-Tasman Resources clarified that ‘existing interests’ include Tikanga-based customary rights and interests, including kaitiakitanga and rights claimed under the Marine and Coastal Area (Takutai Moana) Act 2011, even if they are yet to be granted.89 The Supreme Court in Trans- Tasman Resources also held that tikanga as law must be taken into account by the decision-maker as “other applicable law” under s 59(2)(l) of the Act, where “its recognition and application is appropriate to the particular circumstances of the consent application at hand”.90
The relevant decision-making criteria in s 59 must be weighed by the decision-maker in a way that achieves the purpose as outlined in s 10.91 The EEZ Act also contains factors that decision-makers are prohibited from taking into account, such as the effects on climate change of discharging greenhouse gases into the air.92 This prohibition effectively means that consenting authorities are unable to take into account the positive benefits that offshore wind development has on reducing national emissions and thus mitigating climate change, an issue which will be elaborated on further in chapter three. Contrastingly, the Resource Management (Energy and Climate Change) Amendment Act 2004 explicitly incorporated climate change considerations into the equivalent section of the RM and the NBEA contains several references to greenhouse gas emissions reductions and adaptation to climate change.93
In considering the effects of an activity on existing interests under section 59(2)(a), a marine consent authority must have regard to the area that the activity would have in common with the existing interest, the degree to which both the activity and the existing interest must be carried out to the exclusion of
89 Trans-Tasman Resources, above n 67, at [8].
90 At [9].
91 At [249] and [253].
92 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 59(5)(b).
93 Natural and Built Environment Act 2023, ss 6, 30, 89, 174, 337.
other activities, whether the existing interest can be exercised only in the area to which the application relates, and any other relevant matter.94
Section 61 requires the decision making authority to seek out all required information.95 Where information is inadequate, the decision maker must err on the side of caution and environmental protection.96 For activities other than discharges and dumping, if erring on the side of caution means that the activity will not be granted consent, the marine consent authority must first consider whether an adaptive management approach would allow the activity to proceed.97
For activities other than discharges and dumping, as previously mentioned the next step in the decision- making process involves considering whether an adaptive management approach could mitigate uncertainty and risk sufficiently to permit the activity.98 The EEZ Act empowers the EPA to “impose conditions under section 63 that authorise the activity to be undertaken in stages, with a requirement for regular monitoring and reporting before the next stage of the activity may be undertaken or the activity continued for the next period.”99
The EEZ Act defines an adaptive management approach as follows:100
(a) allowing an activity to commence on a small scale or for a short period so that its effects on the environment and existing interests can be monitored:
(b) any other approach that allows an activity to be undertaken so that its effects can be assessed and the activity discontinued, or continued with or without amendment, on the basis of those effects.
The Act also provides that in order to incorporate an adaptive management approach into a marine consent, a marine consent authority may impose conditions under s 63 that authorise the activity to be
94 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 60.
95 Section s 61.
96 Section 61.
97 Section 61(3).
98 Section 61(3).
99 Section 64(3).
100 Section 64(2).
undertaken in stages, with a requirement for regular monitoring and reporting before the next stage of the activity may be undertaken or the activity continued for the next period. Therefore, in the context of offshore wind development, an adaptive management approach is likely to involve allowing a smaller number of turbines to be placed initially, so that environmental effects can be monitored as they go on a smaller scale, before the project is allowed at full scale.
Regarding consents relating to discharges and dumping, the Court in Trans-Tasman Resources affirmed that adaptive management is not an available approach for such consents.101 However, if conditions can be imposed that “that avoid material harm, mitigate the effects of pollution so that harm will not be material, or remedy it so that, taking into account the whole period of harm, overall the harm is not material” then the consent may be allowed.102 This is of course, provided that the decision maker decides the consent should be granted after taking into account all the relevant factors under s 59 in a balancing exercise, in light of s 10(1)(a).103
If the activity gains approval for a marine consent, the decision making authority may attach conditions that the consent will be subject to, to mitigate adverse effects of the activity .104
2.2.5. Reviews of Consent
After the consent is granted, the Environmental Protection Authority reserves the right to review the duration and conditions of the consent at any time, for any of the following reasons:105
101Trans-Tasman Resources, above n 65, at [104].
102 At [260].
103 At [5].
104 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 62(3).
105 Section 76.
Following review, the Environmental Protection Authority may cancel or shorten the duration of a consent, if the effects of the consent, or the scale/intensity of the effects were not anticipated when the consent was granted and shortening the duration of the consent is the only way to avoid, remedy or mitigate those effects.106
106 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 82.
III Analysis of the Current Regime - Limitations of the EEZ Act Framework
III Limitations of the EEZ Act Framework
This chapter will delve into the aspects that have emerged as potential issues within the existing framework in the context of offshore wind consenting. Most of these have been raised by the renewable energy sector as inhibiting offshore wind development in New Zealand.107 It could be argued that due to the positive role offshore wind plays in combating climate change, these developments should be exempt from this framework and be governed by a bespoke “fast track” legislation that better recognises the benefits of and incentivises offshore wind development.108
Despite its extensive coastline and clear potential for wind energy, the development of the offshore wind sector in New Zealand is currently at a standstill.109 Harnessing the potential of offshore wind in New Zealand’s waters depends on a number of factors, including: technological development, cost effectiveness to compete with existing energy sources, stable funding, appropriate policy frameworks and effective consenting procedures.110 This section will focus on how the final two factors mentioned have contributed to the failure of offshore wind energy projects to materialise in any significant way in New Zealand to date.
Consenting processes for offshore wind under the current regulatory framework are still deemed by the renewable energy sector to be a non-technical barrier to offshore wind development because of the complexity of consenting procedures and the absence of dedicated legal frameworks to support offshore renewable wind development.111 Existing consenting frameworks for offshore wind projects utilise procedures that have been designed for other sectors and are seen as inappropriate to fulfil the needs of offshore wind energy development.112 The consenting processes and the associated information collecting required to comply with those processes are also viewed as overly onerous by the renewable energy sector, due to the relative newness of the technology and lack of environmental baseline
107 Ministry of Business, Innovation and Employment, above n 1.
108 Email from the New Zealand Wind Energy Association to the Ministry of Business, Innovation and Employment regarding the Enabling Investment in Offshore Renewable Energy Discussion Document (April 2023).
109 Salvador and others, above n 35, at 68.
110 At 68.
111 New Zealand Wind Energy Association, above n 108.
112 Teresa Simas and others “Review of consenting processes for ocean energy in selected European Union Member States” (2015) 9 Int. J. Mar. Energy 41 at 41.
knowledge of New Zealand’s EEZ leading to a strong interpretation of the precautionary principle being applied.113
The difficulties and associated time delays caused by the consenting framework for offshore wind projects pose a sizable barrier to getting any offshore wind project up and running. Consenting delays affect the economic viability of a project by significantly increasing the project’s risk profile.114 They make it difficult to schedule resources and push out milestones agreed upon in contracts.115 Onerous conditions imposed on granted consents can also negatively impact the economic viability of the project.116
There is also the added complication of connection to the national grid. These connections must be agreed upon well in advance of the wind farm coming ‘on-line’, but are also usually dependent on approved environmental consent for the development.117
The renewable energy sector claims that there are a number of limitations existing within the current environmental consenting process that are unreasonably inhibiting offshore renewable development. The next section will discuss the following limitations of the current regime: the environmental bottom lines in s 10, precaution in the information principles, stringent discharge and dumping provisions, cross boundary complexities, the inability of the regulatory framework to provide for the weighing of competing offshore proposals, and lack of policy direction.118 Some of these limitations will be found to be unjustified barriers to offshore renewable energy development, whilst some are necessary safeguards put in place to protect New Zealand’s unique natural environment and biodiversity.
3.1. Purpose Contains “Environmental Bottom Lines”
When interpreting the purpose of the EEZ Act, the Supreme Court adopted a sustainability oriented approach to reading s 10(1)(b), favouring the "biophysical bottom line" over a more discretionary
113 Emma Gibson and Peter Howsam “The legal framework for offshore wind farms: a critical analysis of the consents process” (2010) 38 Energy Policy 4692; Trans-Tasman Resources, above n 67.
114 At 4699.
115 At 4699.
116 At 4699.
117 At 4699.
118 Ministry of Business, Innovation & Employment, above n 2, at 10.
"overall broad judgment" approach.119 The Court held that s 10(1)(b) limb of the purpose is a separate and additional consideration from the ‘sustainable management’ limb of the purpose in s 10(1)(a).120 It was found that the biophysical bottom line under s 10(1)(b) means that, if the environment cannot be protected from material harm from a proposed discharge or dumping activity then it cannot be allowed.121
Furthermore, the interpretation of the word "while" in section 10(2) was deemed to mean ‘at the same time’.122 In defining ‘while’ in this way, the court emphasised that the purpose of the Act requires simultaneous achievement of safeguarding the life supporting capacity of the environment, avoiding, remedying or mitigating any adverse effects of an activity on the environment and enabling economic well-being, thus protecting the functional integrity of marine ecosystems.123 The Court broadly defined the scope of "economic well-being" as encompassing not only fiscal values associated with proposed activities but also “the direct and indirect values of [natural] resources as used by others or for their intrinsic and ecosystem services values.”124 This marked a progressive shift in New Zealand's decision- making, essentially finding that safeguarding marine ecosystems is a prerequisite for New Zealand’s economic well-being.
The environmental bottom lines contained in the purpose of the EEZ Act pose a potential barrier to renewable energy development in New Zealand. This barrier stems from the strict requirement that if the environment cannot be protected from material harm resulting from the discharge of sediment in the installation phase, a proposed offshore renewable energy project cannot be allowed. While this might appear to hinder development efforts, it is essential to recognise that this environmental safeguard is integral to the EEZ Act's purpose. It acknowledges the critical importance of preserving the marine ecosystem, recognising that a healthy environment is not only an ethical imperative but also essential for the nation's long-term well-being. In this context, protecting the functional integrity of marine ecosystems can never be a mere balancing exercise against other interests but a fundamental necessity to ensure the continued sustainability and resilience of New Zealand's natural resources and the well-
119 Trans-Tasman Resources, above n 67, at [3].
120 At [245].
121 At [3].
122 At [87].
123 At [87].
124 At [86].
being of its people. This approach is also required to meet New Zealand’s international obligations, which will be discussed further in 3.3. Thus, while it may present challenges to offshore renewable energy development, this stringent environmental requirement within the EEZ Act is ultimately necessary to maintain the delicate ecological balance upon which the country's prosperity relies.
3.2. Information principles
When assessing marine consent applications, the Environmental Protection Authority (EPA) must consider criteria outlined in sections 59 and 60 of the EEZ Act, along with the information principles specified in section 61.125
Section 61 requires the decision making board to seek out all required information when reviewing an application for a marine consent. As previously mentioned, where information is inadequate, the decision maker must err on the side of caution and environmental protection.126 Utilising international commentary on environmental precaution, the Supreme Court in Trans-Tasman Resources outlined that: “[a]t its most basic, environmental precaution involves the idea that it is better to be safe than sorry when the effects of activities are uncertain” and held that “concern underlying the reference to the need to favour caution in the EEZ Act obviously reflects that idea.”127
The information principles mandate the EPA to base its decisions on the "best available information," which is defined as the best information available in the specific circumstances without unreasonable cost, effort, or time.128 This determination requires the EPA to exercise their judgment and discretion. In Trans-Tasman Resources, the EPA deemed the available information about potential adverse effects as uncertain and inadequate, particularly due to the lack of baseline monitoring data.129 Consequently, the EPA was required to favour caution and environmental protection, a directive and “absolute” requirement under the EEZ Act, even though this does not automatically entail refusing consent in cases other than marine discharge and dumping applications.130
125 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 10(3)(b).
126 Section 61(2).
127 Trans-Tasman Resources, above n 67, at [107].
128 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 61.
129 Trans-Tasman Resources, above n 67, at [837].
Importantly, the requirement to prioritise caution and environmental protection due to scientific uncertainty, as outlined in section 61(2), should not be traded off against economic well-being.131 Additionally, the protection of important biological resources must carry more weight than economic benefits when considering marine consent applications, as stipulated by sections 59(2)(d) and 59(2)(e).132
The emphasis on environmental precaution in s 61 remains as one of the major barriers to offshore wind development in New Zealand’s EEZ. There is comparatively very little environmental baseline data about New Zealand’s EEZ, which unsurprisingly makes consenting for wind projects in the EEZ more difficult than on land. The industry and renewable energy proponents believe that new regulatory settings are needed that better reconcile the policy direction and environmental benefits of renewable energy with the environmental uncertainty and risks of establishing offshore wind farms.133 However, there is a strong argument that the least a consenting authority could require of a developer is that they are informed about any adverse effects their project may have on the surrounding environment.
3.3. No Adaptive Management Approach Allowed for Discharges and Dumping
Trans-Tasman Resources held that in order to meet the “protect from pollution” part of the purpose of the EEZ Act, the board must be satisfied that there will be no material harm at all occurring from the discharge or dumping.134 The Court held that conditions may be imposed on discharge and dumping consents that avoid material harm altogether, or remedy or mitigate any harm to the point the harm is no longer material, in which case the discharge of harmful substances need not be prohibited.135 However, the court affirmed that “it is not permissible to impose a condition that amounts to or contributes to an adaptive management approach” for a marine discharge or dumping consent.136
As there initially will be an element of discharging seafloor material when placing the turbines and cables, the prohibition on allowing adaptive management approaches for marine discharging has the potential to increase the difficulty of gaining consent for large scale offshore wind projects in the EEZ,
131 Trans-Tasman Resources, above n 67, at [139].
132 At [106].
133 Ministry of Business, Innovation & Employment, above n 2.
134 Trans-Tasman Resources, above n 67, at [3].
135 At [81].
where it the effects of redepositing the sediment are less certain due to the nature of the EEZ and the relative newness of the technology (for mining operations in the EEZ, the oil and minerals are transported to shore via ship). This could be argued to be too harsh of a tilt against offshore renewable development, as it doesn’t take into account the positive role that renewable energy plays in decreasing global warming which is linked to ocean health.
However, the reason for this strict approach to the issue of discharges and dumping is that New Zealand is subject to various international obligations and agreements regarding the protection of the marine environment, including regulations related to dumping or discharging waste in its EEZ. The EEZ Act also provides that it continues or enables the implementation of New Zealand’s international obligations relating to the marine environment.137 Section 11 of the EEZ Act provides that those conventions include: the United Nations Convention on the Law of the Sea 1982 (LOSC);138 the Convention on Biological Diversity 1992;139 MARPOL;140 and the London Convention.141 The EEZ Act is intended to give effect to New Zealand’s international obligations, as highlighted in Helu v Immigration and Protection Tribunal.142 The court in Trans-Tasman Resources acknowledged that “relevant international obligations also provide an overlay to the approach to be taken” and that these instruments all inform the interpretation of the EEZ Act.”143 In Trans-Tasman Resources, the Court identified the LOSC in particular as the most relevant international obligation to discharges and dumping applications in the EEZ.144 LOSC is a comprehensive international treaty that defines the rights and responsibilities of countries in their use and protection of the oceans and it applies to activities within the EEZ.145 Part XII of the LOSC revolves around the “protection and preservation of the marine environment”.146 It
137 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 11; Trans-Tasman Resources,
above n 67, at [26].
138 United Nations Convention on the Law of the Sea 1833 UNTS 397 (signed 10 December 1982, entered into force 16 November 1994).
139 Convention on Biological Diversity 1760 UNTS 79 (opened for signature 5 June 1992, entered into force 29
December 1993).
140 The International Convention for the Prevention of Pollution from Ships 1340 U.N.T.S. 184 (17 February 1973, entered into force 2 October 1983).
141 London Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1046 UNTS 120 (opened for signature 29 December 1972, entered into force 30 August 1975).
142 Samuela Faletalavai Helu v Immigration and Protection Tribunal [2015] NZSC 28 at [143].
143 Trans-Tasman Resources, above n 67, at [86], [99].
144 At [87].
145 United Nations Convention on the Law of the Sea, above n 138, art 55.
146 Trans-Tasman Resources, above n 67, at [88].
establishes rules for the prevention of marine pollution, including rules related to dumping and discharging of waste, requiring parties to take “... all measures consistent with this Convention that are necessary to prevent, reduce and control pollution of the marine environment from any source, using for this purpose the best practicable means at their disposal.”147 The LOSC requires coastal states to “adopt laws and regulations to prevent, reduce and control pollution of the marine environment arising from or in connection with sea-bed activities subject to their jurisdiction”, national regulations “are to be “no less effective” than international rules” according to art 208(3).148
It is unlikely that the environmentally stringent nature of the discharges and dumping provisions in the EEZ Act could be lessened without breaching New Zealand’s international obligations, nor would New Zealanders want to risk the environmental degradation that might result from doing so, and thus this particular barrier will be one that offshore wind developers will have to work around, regardless of whether or not a new framework is created.
3.4. Review of consents
After a marine consent is granted, the EPA reserves the right to review the duration and conditions of the consent at any time, due to a wide range of reasons, including unanticipated environmental effects or new information coming into light.149 This is in order to protect our natural environment from unexpected consequences of an activity, however it has been flagged by those in the renewable energy sector as a barrier to renewable energy development because it creates further uncertainty for investors and developers, making projects in New Zealand currently very difficult to finance.150
3.5. No ability for consenting authorities to weigh the merits of competing projects.
There is currently no tendering process provided in the EEZ Act to allow decision-makers to weigh the merits of competing applications. Therefore, consents for an offshore renewable energy project would be issued on a first-in first served basis under the current regime. This approach to granting consents is unlikely to produce the best outcomes for the environment or the renewable energy sector, as it risks
147 United Nations Convention on the Law of the Sea, above n 138, art 194(4).
148 Art 208(1).
149 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 76.
150 Ministry of Business, Innovation and Employment, above n 1.
reducing competition between developers, increasing speculation and incentivising ‘land grabbing’ over logistic, environmental and economic suitability of the project to the area.151
However, concerns surrounding the “first in first served” approach to consenting may soon be quelled, due to the recent government announcement detailing their plan to introduce a permitting regime targeted at this particular issue.152 The regime would revolve around the granting of ‘feasibility permits’ with a duration of seven years, that are granted on merit based criteria such as financial, technical and commercial capability and national interest considerations, among other factors.153 The 7 year duration was proposed with regard to the relatively low baseline levels of environmental data, especially in the EEZ. The granting of a feasibility permit will then provide the holder with the exclusive right to apply for a commercial permit that will allow them to construct and operate an offshore renewable energy project in the area.154 The feasibility permits will be subject to ‘use it or lose it’ provisions to prevent ‘land banking’, which would require the developer to be actively meeting feasibility progress milestones to maintain their permit.155
This permitting regime is not being proposed to replace the current environmental consenting regime under the NBEA and EEZ Act. Instead, it is intended to sit alongside the current environmental regime, as they serve two different purposes.156 The permitting framework is intended to provide a mechanism for comparing competing offshore renewable energy proposals, and provide certainty for investors, developers and the public that a project is financially and technically able to be both delivered and decommissioned.157 On the other hand, the environmental consenting regime is in place to “promote the sustainable management of natural and physical resources” and assess environmental effects of offshore renewable development by considering its impacts on biological diversity and seafloor morphology.158 Maintaining separate frameworks for commercial permits and environmental consents is consistent with
151 Brian Snyder and Mark Kaiser “Offshore wind power in the US: regulatory issues and models for regulation” (2009) 37 Energy Policy 4442 at 4445.
152 Ministry of Business, Innovation & Employment, above n 2, at 11.
153 At 11.
154 At 11.
155 At 12.
156 At 12.
157 At 12.
158 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 10.
the approach to regulating mining operations in New Zealand, which are governed by the Crown Minerals Act 1991 and its interaction with the NBEA and the EEZA.159
3.6. Cross-boundary applications
Projects that are constructed in the EEZ would still require cabling to be laid from the deep sea location into shore, crossing over the coastal marine area. Thus there are likely to be issues surrounding cross boundary applications, where a project spans across both the coastal marine area and the territorial sea. Cross boundary issues increase the complexity of consenting an offshore renewable project, as developers are needing to work with multiple consenting authorities and satisfy the requirements of both the EEZA and the NBEA.160
A ‘cross boundary activity’ is defined in the EEZ Act as “an activity that is carried out partly in the exclusive economic zone or in or on the continental shelf and partly in New Zealand (within 12 NM of the shoreline)”.161 The Act also defines a ‘joint application’ as an application that comprises of both a resource consent application under the NBEA, and a marine consent application under the EEZ Act.162 The cross-boundary application subpart does not apply if a part of the activity to be carried out in the coastal marine area is a restricted coastal activity under section 23 of the NBEA.163
Section 90 provides that a person who intends to undertake a cross boundary activity may either prepare a joint application for consent that complies with the requirements of both the NBEA and the EEZ Act, or they may apply for a marine consent and a resource consent for a cross-boundary activity separately, whether concurrently or at different times.164 Joint applications must be sent to both the EPA and the relevant resource consent authority. The EPA also has the power to decide that a joint application is more appropriate and thus require that a joint application be made, at any point before or during the processing of the marine consent application, as long as the application has not been referred to a board
159 Ministry of Business, Innovation & Employment, above n 2, at 12.
160 At 40.
161 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 88.
162 Section 88.
163 Section 89.
164 Section 90.
of inquiry.165 The inverse is also true, allowing the EPA to separate joint applications.166 The EPA and the relevant consent authority under the NBEA must share all information and reports relating to the application, however the decisions on each part of the application must still be made solely by the respective consent authority.167 This seems inappropriate when it is considered that the vast majority of the offshore wind project is occurring in the EEZ.
These provisions attempt to streamline the processing of applications, by allowing a centralised body such as the EPA to process the application as opposed to a local authority. The cross boundary provisions might have the effect of slightly decreasing bureaucratic delays by requiring the two consenting authorities to share information with each other. However, the requirement for developers to comply with multiple consenting regimes still remains, despite attempts in ss 90 to 98 to mitigate some of the burden on developers.
Section 99 of the EEZ Act deals with applications for consent for nationally significant cross-boundary activities that have been referred to a board of inquiry. It is uncertain as to whether laying the cabling for an off-shore wind farm would be found to be a proposal of national significance. If it was, section 99 provides that the EPA may delegate their functions to the board of inquiry in relation to an application for a marine consent that relates to the part of the activity that is to be carried out in the EEZ or in or on the continental shelf.168 If the EPA does so, the decision making board must still apply ss 59 to 67 in making its decision on the application as if the board were a marine consent authority.169 The hearing requirements in ss 50 and 51 of the EEZ Act also would not apply, and instead the EPA must process the application for a marine consent together with the associated application for a resource consent in accordance with the NBEA provisions specified in the EEZ Act s 99(5).170
Since the board of enquiry is essentially required to assume the functions of the marine consent authority and apply ss 59 to 67 of the EEZ Act if they are delegated the EPA’s powers, it means that the cross boundary provisions do not have much tangible effect in removing the complexity barriers posed by the
165 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 93.
166 Section 94A(1).
167 Sections 97, 98.
168 Section 99.
169 Section 99(4)(b).
cross boundary issues surrounding constructing offshore wind projects in the EEZ. This is because although the resource and marine consent applications will be processed as one by a singular board of inquiry, developers are still required to effectively comply with both separate consenting regimes in order to be granted the combined consent.
The area surrounding the submarine cabling may be classified as a tier two marine protected area under the Submarine Cables and Pipelines Protection Act, which means that anchoring and certain types of fishing operations (such as bottom trawling) would be prohibited within a certain proximity of the submarine cables.171 The court in Crest Energy emphasised the importance of the potential impact that offshore renewable energy development could have on existing fisheries interests, and it is likely that any proposal to lay cabling inside established trawling grounds within the territorial sea or otherwise, would meet resistance from the fishing industry which would increase the difficulty of gaining the associated resource consent for the cabling part of the joint application.172
Adding to this issue of competing interests is the possibility that the cable’s pathway to shore will cross a marine protected area (such as a marine reserve)173 or an area of the common marine and coastal area over which an iwi or hapū has secured recognition of customary rights or title.174 If secured under the Marine and Coastal Area (Takutai Moana) Act 2011, recognition of customary marine title means that the permission of the relevant iwi and hapū will be needed to lay the cable.175 Recognition of protected customary rights may also impact on the ability to obtain consent to lay the export cable across the common marine and coastal area.176
Further compounding the difficulty of gaining consents for the submarine cabling aspect of an offshore wind farm is the lack of effective policy direction in favour of renewable energy development under the RMA. As previously discussed, under the RMA the Minister for the Environment issued a NPS-REG to assist New Zealand in achieving the Government’s target of 90 per cent of electricity from renewable
171 Submarine Cables and Pipelines Protection Act, s 13.
172 Crest Energy, above n 21, at [93].
173 Marine Reserves Act 1977, s 4.
174 Marine and Coastal Area (Takutai Moana) Act, s 9 defines this as all areas of the marine and coastal area excluding specified freehold land, or Crown-owned land held as a conservation area, national park or reserve. 175 Section 68.
176 Section 55.
sources by 2025.177 The NPS-REG promotes consistency in the approach to balancing competing interests when considering resource consent applications for renewable energy projects. One of the primary aims in issuing the statement was to provide greater certainty for applicants, investors, and the wider community.178 The NPS-REG applies to the construction, operation and maintenance of structures associated with renewable electricity generation activities at any scale that fall under the RMA consenting regime.179 The statement also covers investigation activities for offshore renewable electricity generation such as wind masts.
The NPS-REG has essentially three requirements for decision makers to have regard to. The first policy requires decision makers to “recognise and provide for the national significance of renewable electricity generation activities, including the national, regional and local benefits relevant to renewable electricity generation activities.”180 Policy B requires the acknowledgement of “the practical implications of achieving New Zealand’s target for electricity generation from renewable resources.”181 Policy C requires decision makers to acknowledge the practical constraints associated with the development, operation, maintenance and upgrading of new and existing renewable electricity generation activities.182 Finally, Policy C2 provides that when considering any residual environmental effects of renewable electricity generation activities that cannot be avoided, remedied, or mitigated, decision-makers shall have regard to offsetting measures or environmental compensation including measures or compensation which benefit the local environment and community affected.183
In a 2021 review of the efficacy of the National Policy Statement on Renewable Energy Generation, it was found that the National Policy Statement alone does not appear to have a significant impact on the way final decisions on renewable energy generation consents are made.184 No noticeable impact on resource consent application time, costs, processing methods or amount of work required by applicants was noted either.185 Many generators considered that there was no noticeable increase in certainty for
177 New Zealand Gazette, above n 32, at 4.
178 New Zealand Gazette, above n 32, at 4.
179 At 4.
180 At 5.
181 At 5.
182 At 5.
183 At 6.
184 Ministry for the Environment, above n 33.
185 At 6.
applicants, decision-makers or the community, but this was due to the inconsistent approach between planning documents across the country. Generators also noted that they had not experienced any major changes or shifts in perspective towards REG activities from the councils as a result of the NPS-REG, with key areas of contention (such as noise and visual effects) not being handled any differently because of the NPS-REG.186
National policy statements have the potential to create hard policy bottom lines, such as the New Zealand Coastal Policy statement’s environmental bottom line that was affirmed in the King Salmon and Trans- Tasman Resources cases.187 The NPS-REG, however, is not drafted in a particularly directive manner, and so does not have the same binding effect. The report also found that the complexity of large scale renewable energy projects, and the significant effects on the environment and amenity value that often arise from such activities, mean that most projects are still going to prove challenging to consent, regardless of any policy changes filtering down to the consenting and planning level from the non- directive wording in NPS-REG.188
The inefficacy of the NPS-REG heightens the challenges associated with obtaining RMA approval for the submarine cabling component of the project that extends across the coastal marine area. These cables are critical components of offshore wind projects, serving as conduits for transmitting energy to the mainland grid. Therefore, any hurdles encountered in gaining consent for their deployment can considerably impede the progress of the entire renewable energy initiative.
3.7. Lack of climate change considerations
Section 59(5)(b) outlines the factors that the EPA is unable to have regard to when considering a marine consent application.189 One of the factors listed in the section, that a minister is prohibited from having regard to, is the effects on climate change of discharging greenhouse gases into the air.190
186 Ministry for the Environment, above n 33, at 6.
187 Sustain Our Sounds Incorporated v. The New Zealand King Salmon Company Limited [2014] NZSC 40 at [132];
Trans-Tasman Resources, above n 67, at [185].
188 Ministry for the Environment, above n 33, at 27.
189 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 59(5)(b).
190 Section 59(5)(b).
The wording of the s 59(5)(b) appears to be aimed at preventing marine consenting authorities from citing greenhouse gas emissions as environmental grounds to refuse offshore fossil fuel development. The rationale behind including this section is likely that Parliament intended for the climate change response to be governed by its own separate framework; the Climate Change Response Act 2002. However, this section also has the inadvertent effect of preventing consenting authorities from factoring in the benefits of renewable energy in reducing emissions. Allowing for positive climate change effects to be factored in by the EPA would help to tilt the scale in favour of consenting offshore wind development, as the climate benefits of development would have an indirect positive impact on the environment, human health, biodiversity, the economy and the efficient use and development of natural resources (all of which are currently relevant considerations in considering an application).191
3.8. Lack of policy direction
The EEZ Act was amended in 2017 to allow for the creation of EEZ policy statements.192 The purpose of an EEZ policy statement is to state national direction and policy to guide decision making on applications for marine consents in accordance with the purpose of the EEZ Act.193 When deciding on the outcome of an application for a marine consent, the marine consent authority must “have regard to” all EEZ policy statements.194
Overall, the Act provides that policy statements are to be prepared with public consultation, with the Minister notifying the public, iwi authorities, regional councils, and persons whose existing interests may be affected, of the proposed statements and the Minister’s rationale for creating the statement.195 However the Minister has some discretion to decide on the exact process that will be followed for any particular policy statement.196 An EEZ policy statement can apply to the entirety of New Zealand’s EEZ and the continental shelf, or only part of the area.197
191 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 59(2).
192 Section 37A.
193 Section 37A(1).
194 Section 59(3)(aa).
195 Section 37B(a).
196 Section 37B(b).
197 Section 37A(2).
Similar to the RMA, under the EEZ Act all marine consent applications must align with the sustainable management purpose. Notably, unlike the RMA, there have been no policy statements or plans created to guide its implementation. Instead, decision-making criteria and the application of information principles play a pivotal role.198 As previously discussed, requiring decision makers to rely purely on those sections is not conducive to fostering renewable energy development. The lack of policy direction in this area leaves marine consent authorities with no guidance on how to assess the importance of offshore renewable energy generation within the regulatory framework, especially where conflicts arise with other environmental, economic and social interests. Thus, without any clear policy direction (in the form of an EEZ policy statement) acknowledging the important role that renewable energy development plays in reaching our climate and emissions goals, it is unlikely that the current stagnation of offshore wind development will be remedied under our current regulatory framework.
If an EEZ policy statement were to be created by the Minister to guide policy direction in favour of renewable energy development in the EEZ, the aforementioned prohibition of decision makers taking into account climate change considerations in s 59(5)(b) might cause some difficulty. Section 59(5)(b) states that it applies ‘despite’ s 59(3) (which requires the authority to consider EEZ policy statements).199 This means that a conflict could arise between s 59(5)(b) and an EEZ policy statement designed to recognise the positive effect that transitioning to renewable energy will have in helping New Zealand reach its emissions targets.
198 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 10(3).
199 Section 59(5)(b).
IV Which Way Forward? Improving New Zealand’s Regulatory Framework for Offshore Wind
IV Improving New Zealand’s Regulatory Framework for Offshore Wind
Thus far, this dissertation has outlined the ways in which the current regulatory framework is unfavourable to developing offshore wind projects, and this is evidenced by the absence of any successful development in our waters. If the government wants to deliver on their promise that “the future of energy in New Zealand is renewable” and are serious about phasing out fossil fuels and replacing them with clean energy to meet emissions targets, then reform to our current framework is needed to better facilitate offshore wind development.200
The aim of this chapter is to propose regulatory improvements that would make the process more "attractive" for developers in New Zealand and thus encourage more investment in offshore wind energy, whilst not losing sight of the need to safeguard New Zealand’s natural environment and unique biodiversity.
4.1. EEZ Policy statement
As highlighted earlier, the provisions of the EEZ Act allowing for the creation of EEZ policy statements have not been utilised by the Minister to date and thus there are currently no existing EEZ policy statements to guide marine consent authorities on how to weigh the importance of offshore renewable energy development. The Ministry for Business, Innovation and Employment recently conceded that there ‘may be a need’ for a future workstream to address strengthening policy direction in favour of offshore renewable energy development through an EEZ policy statement.201 In my view, the creation of an EEZ policy statement that is favourable to offshore renewable energy development is one of the key steps that our government could take to transform our existing regulatory framework into one that better fosters offshore renewable energy development.
EEZ policy statements have the potential to be an effective instrument for influencing consenting practices in our EEZ. When granting marine consents, decision makers must ‘have regard to’ EEZ policy statements. As previously mentioned, in the context of national policy statements under the RMA, the Court of Appeal in RJ Davidson Family Trust advised that caution should be taken in granting resource
200 Megan Woods, above n 6.
201 Ministry of Business, Innovation & Employment, above n 2, at 43.
consents that directly goes against any policy or objective in a national policy statement.202 It is likely that the same caution would extend to marine consent authorities in granting a marine consent that contravenes an EEZ policy statement.
The EEZ Act provides that in determining whether it is desirable to prepare an EEZ policy statement, the Minister may have regard to:203
There is no guidance within the EEZ Act with regards to the contents of an EEZ policy statement.204 However, inspiration could be drawn from the RMA, which provides detail surrounding the contents of a national policy statement, which is the equivalent of an EEZ policy statement for use within the jurisdiction of the RMA 1991.205
4.1.1. Lessons from the National Policy Statement on Renewable Energy Generation
In drafting an EEZ policy statement in relation to offshore renewable energy generation, it would be wise for the Minister to learn from the aforementioned shortcomings of the National Policy Statement on Renewable Energy Generation (NPS-REG) that was issued under s 52(2) of the RMA in 2011.206
As previously mentioned, in a 2021 review of the efficacy of the NPS-REG, it was found that the National Policy Statement alone does not appear to have a significant impact on the way final decisions on renewable energy generation consents are made due to the lack of clarity in how the NPS was to be implemented.207 In this sense, it will be crucial for any future EEZ policy statement to contain a sufficient degree of specificity and clarity with regard to how the policy statement’s objectives are to be given
202 RJ Davidson Family Trust v Marlborough District Council, above n 31 at [304].
203 Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, s 37A.
204 Ministry of Business, Innovation & Employment, above n 2, at 43.
205 Resource Management Act, s 45
206 New Zealand Gazette, above n 32, at 4.
207 Ministry for the Environment, above n 33.
effect by consenting authorities, to ensure universal consistency in application and tangible increases in metrics such as resource consent application time, costs and work required.
The NPS-REG was also not drafted in a particularly directive manner, which decreases its binding effect on decision makers as discussed in Part III. A key feature that will determine the efficacy of any new EEZ policy statement will lie in the nature of its wording. In this regard, the Minister should learn from the shortcomings of the National Policy Statement on Renewable Energy Generation 2011 and craft an EEZ policy statement that promotes the development of offshore renewable energy projects in the EEZ using directive and non-ambiguous language, creating bottom lines so that the policy aims can filter down and influence decision making on applications for marine consents.
Whilst the NPS-REG attempted to strengthen national direction on climate change considerations and the benefits of renewable energy, this was not very effective, and it is pertinent that legislators craft any EEZ policy statements in a stronger and more directive matter than the NPS-REG if we are to see any tangible improvement in the ease of consenting offshore wind projects.
4.2. Overseas approaches
The first overseas consenting framework that will be examined is that of Denmark. Denmark is home to thirteen offshore wind farms that generate a capacity of 1271 MW.208 The current processing time for offshore wind farm consents is approximately sixteen months and it has the lowest project cancellation rate in Europe.209 The Danish system employs a “one stop shop” method, where a singular body is responsible for providing all three of the successive consents that are required to investigate feasibility, establish and operate offshore wind farms.210 An environmental impact assessment may also need to be undertaken when the project has a foreseeable impact on the environment.211
There are two routes under the Danish framework by which developers can gain Danish Energy Authority (DEA) approval for a project.212 The first avenue is through a ‘Government Call for Tenders”,
208 Nghiem and Pineda, above n 55.
209 Salvador and others, above n 35, at 4.1.1.
210 At 4.1.1.
211 Sorren Keller “Procedures and Permits for Offshore Wind Parks” (2016) Danish Energy Agency
<https://ens.dk/en/our-responsibilities/wind-power/offshore-procedures-permits>.
where the DEA opens a particular site that has been deemed economically, socially and environmentally suitable and invites tenders for the establishment of an offshore wind farm. The highest bidder is then selected to construct the wind farm.213 Alternatively, an “Open Door Procedure” may be utilised. Under this procedure, a developer initially submits a request to the DEA outlining a proposal to construct an offshore wind farm in an area outside the preselected zones.214 The DEA then conducts a hearing in which any potential conflicting interests are identified and assessed (including environmental interests among others), ultimately deciding if the offshore wind project is appropriate for the proposed area.215 If this is found to be the case, then consents for initial investigations will be granted, and if those show that the project does not interfere with existing interests, then the consent to establish the wind farm will also be awarded.216
The Danish bespoke consenting framework effectively streamlines the consenting process, by allowing a singular regulatory body, working under a singular consenting framework to consider all aspects of the application for an offshore wind project. This eliminates any of the aforementioned cross boundary issues arising from cabling or effects that cross the boundary from the EEZ into the territorial sea. In doing so, the Danish framework manages to reduce some of the burden on developers with regard to application preparation and reduces the bureaucratic delays stemming from working under multiple consenting authorities, without sacrificing environmental precaution in the process.
The following diagram illustrates the Danish process for regulating offshore wind projects:217
213 Salvador and others, above n 35,
214 At 4.1.1.
215 At 4.1.1.
216 At 4.1.1.
Similarly, Scotland has also established a framework in which a singular regulatory body is responsible for consenting all aspects of offshore wind projects. The Marine Act 2010 and the Coastal Access Act 2009 established that the Marine Scotland Licensing Operations Team (a body set up by the Scottish government) has sole responsibility for processing all procedural aspects of consenting an entire offshore wind project.218 The Marine Scotland Licensing Operations Team is the only point of contact for developers and is responsible for managing consultations, scoping issues, reviewing supporting material for the application and ultimately issuing the relevant consents.219 An additional advantage of Scotland’s framework in terms of streamlining the process is that reforms to the Town and Country Planning Act has removed the need for developers to create separate applications for onshore ancillary works, as these can be permitted by the Marine Scotland Licensing Operations Team alongside the main offshore project consent.220
218 Salvador and others, above n 35, at 4.1.3.2.
219 At 4.1.3.2.
220 At 4.1.3.2.
Another unique feature of the Scottish consenting framework is the way in which it approaches information gaps and uncertainty. The Marine Scotland Licensing Consents Manual provides reasonably fast time frames from reception of the application in which the application must be processed and decided on by the MS-LOT, similar to our COVID-19 Fast Track Consenting legislation.221 However, the key advantage in the Scottish guidelines is that the initial time frames may increase if additional information is requested of the developer by MS-LOT in the prior consultation phase.222 By adding this caveat into the Manual, the Scottish Government are taking an upstream approach by improving the initial quality of the applications they receive in order to speed up the consenting process.223
Australia’s bespoke regulatory framework is similar to Scotland’s regime, in the sense that it streamlines the consenting process under a singular consenting body.224 The Offshore Electricity Infrastructure Act 2021 applies to offshore areas beginning at 3 NM off the coastline and extending up to the outer boundary of Australia's EEZ.225 Immediate coastal waters within 3 NM continue to fall under the jurisdiction of the individual state and the Northern Territory governments.226 The decision maker in charge of both designating areas for development and granting all relevant permits is the Minister for Climate Change and Energy, who is supported by the Offshore Infrastructure Registrar.227
The Act empowers the Minister for Climate Change and Energy to designate offshore areas suitable for offshore renewable electricity infrastructure.228 When determining the suitability of an area for offshore renewable energy infrastructure, the Minister must consider the potential impacts on other marine stakeholders and interests throughout the phases of construction, installation, commissioning, operation, maintenance, or decommissioning of such infrastructure.229 If the offshore wind project is likely to have a significant impact on the environment, it must comply with the requirements of the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act) and gain approval under the EPBC Act
221 Marine Scotland "Marine Scotland Consenting and Licensing Guidance For Offshore Wind, Wave and Tidal Energy Applications" (2020) Scottish Government <www.gov.scot/collections/marine-licensing-and-consent/>. 222 At 47.
223 Salvador and others, above n 35, at 4.1.3.2.
224 Ministry of Business, Innovation and Employment, above n 1, at 35.
225 Offshore Electricity Infrastructure Act 2021 (Cth), s 17(1).
226 Section 8.
227 Section 154.
228 Section 17(1).
to proceed.230 Additionally, the Minister must have regard to any feedback received during the mandatory consultation process for proposed designated areas, Australia's international commitments related to the area, Australia’s greenhouse gas emissions reduction targets. The Minister also may have regard to any other relevant factors.231
Overseeing the licensing system is the responsibility of the Offshore Infrastructure Registrar. This role encompasses tasks such as evaluating licence applications and providing recommendations to the Minister for Energy.232 The allocation of licences within a designated area is conducted under a merit- based system, incorporating assessments of technical and financial competence as well as the overall suitability of the proposed project to the area.233 Before commencing any offshore infrastructure activities, a licence holder must submit a management plan to the Offshore Infrastructure Registrar for appraisal.234 These management plans contain comprehensive information regarding the operational aspects of a project, and must address environmental management, including how the licence holder will comply with any obligations under the Environment Protection and Biodiversity Conservation Act 1999, or regulations under that Act, in relation to the activities to be carried out under the licence.235
4.3. A Bespoke Framework in New Zealand?
A common denominator that exists between most countries that have been successful in developing a regulatory environment that is favourable to offshore wind development is the establishment of a “One Stop Shop” framework where a singular consenting body facilitates an integrated and simultaneous processing of the main required resource consents.236 Instead of developers having to navigate multiple regulatory agencies and departments, they deal with a single, centralised authority. This authority is responsible for coordinating and processing all the necessary permits and approvals required for offshore wind projects. I would recommend that if the government opts to create a bespoke regulatory framework for offshore renewable energy development, that they follow this model and create one centralised body
230 Australian Government Department of Climate Change, Energy, the Environment and Water, “Establishing Offshore Wind” <https://www.dcceew.gov.au/energy/renewable/establishing-offshore-infrastructure>.
231 Offshore Electricity Infrastructure Act, s 19(1)(e).
232 Section 154.
233 Section 33.
234 Section 114.
236 Salvador and others, above n 35, at 4.1.1.
that processes all aspects of consent for an entire offshore wind project. In doing so, the government would both foster and recognise the critical role that offshore wind will play in reducing New Zealand’s energy emissions, whilst leaving the important environmental safeguards present in our current regime intact. Alternatively, if the government does not opt to create a bespoke regulatory framework, an alternative way of streamlining the current consenting framework would be to amend the cross boundary provisions of the EEZ Act, so that a singular body (such as the EPA) is responsible for all consenting aspects of a cross-boundary activity, in both the EEZ and the coastal marine area under the EEZ Act framework, since the overwhelming majority of the project occurs in the EEZ.
Eliminating the need for developers to engage with multiple authorities and undergo redundant assessments reduces bureaucratic red tape. This can significantly speed up the permitting process, making it more attractive for investors and developers. Having a single point of contact for permitting and approvals increases consistency and predictability in the regulatory environment. Developers can have a clearer understanding of the timeline and requirements for their projects, which is crucial for making investment decisions and would help to provide the increased certainty that is being sought by the offshore wind sector. A streamlined regulatory process will result in cost savings for developers and consenting authorities alike and the reduced time and resources needed to navigate the permitting process will make offshore wind projects more financially viable. This approach would also enable a more coherent and thorough consideration of the environmental impacts of a project across the EEZ and the Territorial Sea, with the singular consent authority assessing all cross-boundary effects.
The Ministry of Business, Innovation and Employment have also recently acknowledged that “having a single consent authority administering all environmental consents for a development could provide better management and oversight of the environmental consenting process across the life of a project.”237
4.3.1. Lessons from the National Development Act
While the argument in favour of a 'One Stop Shop' consenting framework for offshore wind is compelling, the government must exercise caution when drafting expedited legislation in response to a national crisis such as climate change, avoiding the pitfalls encountered with the hasty measures seen in the National Development Act 1979. As part of its ‘Think Big’ economic philosophy, New Zealand’s
237 Ministry of Business, Innovation & Employment, above n 2, at 40.
third National Government passed the National Development Act in 1979.238 The rationale behind the Act was to cut through ‘red tape’ and provide fast track approvals for large scale energy development around the country, a sentiment that echoes the current imperative to increase renewable energy production through better consenting measures today.239 The Act was created in response to what the then-government viewed as ‘intolerable’ delays to national development stemming from the existing development legal framework.240
The Act gave Cabinet Ministers the power to suspend 28 Acts of Parliament and their associated procedural requirements when approving any ‘national development project’.241 The Act also effectively removed the judiciary's ability to challenge the validity of any Order in Council made under the Act, cutting across the rule of law.242
Whilst it is highly unlikely that New Zealand would encounter a situation as extreme as the National Development Act when crafting a bespoke fast track framework for consenting offshore wind (given that only two statutes would be worked around, as opposed to twenty-eight), the NDA still serves as a cautionary tale that policymakers ought to be wary of. The main lesson that can be taken away from the enactment of the NDA is that regulators should avoid straying into creating legislation based on the Machevellian principle that the end justifies the means. In the context of creating a bespoke regulatory framework for offshore wind, this means that legislators should not curtail the stringent environmental protection that the current framework provides to the precious natural environment in pursuit of emissions reductions, as pressing and urgent as decisive climate change action may be. Learning from this example will aid in striking a balance between expediency and responsible development in the modern context.
4.3.2. Environmental Safeguards Under a Bespoke Regulatory Framework
Reflecting the earlier sentiments, whilst streamlining the permitting process is a goal, a “One Stop Shop” framework should not compromise environmental safeguards. Any new framework should prioritise
238 Geoffrey Palmer “The Resource Management Act - How we got it and what changes are
being made to it” (address to Resource Management Law Association, New Plymouth, 27 September 2013) at 2.
239 At 2.
240 At 3.
241 At 2.
242 At 3.
rigorous environmental assessments, robust mitigation measures, ongoing monitoring, stakeholder engagement, and environmental precaution to ensure that offshore wind projects are developed in an environmentally responsible manner. The framework should incorporate a well-defined process for conducting environmental impact assessments and ensuring that they are rigorous and comprehensive. I would recommend that the government transposes the key environmental measures from the EEZ Act (including the environmental bottom lines and information principles that were mentioned in Part III) into any bespoke consenting framework. This approach is essential to achieve the dual goals of renewable energy generation and ecological sustainability.
V Conclusion
V Conclusion
This dissertation has undertaken an exploration of the regulatory landscape surrounding offshore renewable energy development in New Zealand. It has encompassed a critical analysis of the existing regulatory framework, and an exploration of potential pathways forward.
The journey commenced with highlighting New Zealand's exceptional potential for offshore renewable generation, emphasising New Zealand's unique position in harnessing wind energy from our exclusive economic zone. This was followed by an examination of the current legal framework governing offshore renewable energy development in New Zealand, primarily under the EEZ Act.
In the second part of this dissertation, a critical analysis of the existing regulatory regime was undertaken. This scrutiny highlighted both strengths and shortcomings. The current regulatory framework, while correctly intentioned in its emphasis on environmental precaution, has inadvertently created challenges for offshore wind development. Some of these limitations were found to be unjustified barriers to development, given the positive impact that offshore wind generation has on climate change. The complexities arising from the requirement for projects to be consented under both the NBEA and the EEZ Act, the absence of clear policy direction favouring renewable energy development, and the limited consideration of climate impacts in decision-making processes have collectively hindered the growth of offshore wind in New Zealand. However, this dissertation highlighted that it is critical to maintain a robust environmental protection stance, given the country's spectacular natural environment and commitment to safeguarding it. Consequently, certain limitations in the current regime, such as the stringent environmental safeguards, are essential and merit retention under any future framework. Striking the delicate balance between environmental conservation and renewable energy development remains a fundamental challenge within the current regulatory landscape.
The journey culminates in a global perspective, drawing insights from offshore wind frameworks in Denmark, Scotland, and Australia. The examination of these international models underscores the need for a balanced approach that upholds environmental interests while facilitating development. As the way forward for New Zealand is considered, two distinct pathways emerge. First, the creation of a bespoke "One Stop Shop" framework could streamline processes, reduce bureaucratic complexities, and expedite
development while ensuring stringent environmental safeguards. Alternatively, the existing framework could be amended in a way that streamlines the cross-boundary aspects of an offshore wind project. This amendment combined with the formulation of an EEZ policy statement, reinforced with more directive language than the NPSREG 2011, could provide the necessary national direction to promote renewable energy development within an existing sustainable and environmentally conscious framework.
In conclusion, this dissertation has unveiled the intricate interplay between environmental protection and offshore wind development in New Zealand’s regulatory environment. While challenges exist within the current regulatory regime, the potential for a more sustainable and energy-diverse future remains within reach. The decision on the pathway forward lies at the intersection of environmental stewardship and renewable energy ambition, calling for a nuanced and adaptive approach to shape the future of offshore renewable energy development in New Zealand.
VI Bibliography
A Cases
Trans-Tasman Resources Limited v The Taranaki-Whanganui Conservation Board [2021] NZSC 127.
Crest Energy Kaipara Ltd v Northland Regional Council [2009] NZEnvC.
Sustain Our Sounds Incorporated v The New Zealand King Salmon Company Limited [2014] NZSC 40.
Environmental Protection Authority v Chatham Rock Phosphate Ltd [2017] NZHC 307.
RJ Davidson Family Trust v Marlborough District Council [2018] NZCA 316.
Samuela Faletalavai Helu v Immigration and Protection Tribunal [2015] NZSC 28.
B Legislation
Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012. Natural and Built Environment Act 2023.Submarine Cables and Pipelines Protection Act 1996. Resource Management Act 1991.
Resource Management (Energy and Climate Change) Amendment Act 2004. Offshore Electricity Infrastructure Act 2021 (Cth).
Offshore Electricity Infrastructure (Regulatory Levies) Act 2021 (Cth). National and Built Environment Bill 2022 (186-2).
Environmental Protection Authority Act 2011. Marine Reserves Act 1977.
Marine and Coastal Area (Takutai Moana) Act 2011.
C International Conventions
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Convention on Biological Diversity 1760 UNTS 79 (opened for signature 5 June 1992, entered into force 29 December 1993).
International Convention for the Prevention of Pollution from Ships 1340 U.N.T.S. 184 (17 February 1973, entered into force 2 October 1983).
London Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1046 UNTS 120 (opened for signature 29 December 1972, entered into force 30 August 1975).
D Books and Chapters in Books
Ceri Warnock and Maree Baker-Galloway Focus on Resource Management Law (LexisNexis, Wellington, 2015).
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E Journal Articles
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Santiago Salvador and others “Streamlining the consent process for the implementation of offshore wind farms in Spain, considering existing regulations in leading European countries” 157 Ocean Coast. Manag. 68.
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O. Mauricio Hernandez C and others “Environmental impacts of offshore wind installation, operation and maintenance, and decommissioning activities: A case study of Brazil” 144 Renew. Sust. Energ. Rev. 110994.
Taormina Bastian and others “A review of potential impacts of submarine power cables on the marine environment: Knowledge gaps, recommendations and future directions” (2018) 96 Renew. Sust. Energ. Rev. 380
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Tosin Adedipe & Mahmood Shafiee “An economic assessment framework for decommissioning of offshore wind farms using a cost breakdown structure” (2021) 26 Int J LCA 344.
Elizabeth Macpherson and others “Trans-Tasman Resources v Taranaki-Whanganui Conservation Board [2021] NZSC 127: A New “High-Water Mark” for Seabed Mining” (2021) 25 NZ Int. J. Env. Law 277.
Teresa Simas and others “Review of consenting processes for ocean energy in selected European Union Member States” (2015) 9 Int. J. Mar. Energy 41.
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F Reports
Ministry of Business, Innovation and Employment Enabling Investment in Offshore Renewable Energy Discussion Document (December 2022).
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Ministry of Business, Innovation and Employment Energy in New Zealand 2023 (August 2023).
Parliamentary Commissioner for the Environment Hydroelectricity or Wild Rivers? Climate Change Versus Natural Heritage (May 2012) at 5.
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G Internet Resources
Megan Woods "Empowering Kiwis to have a say in the energy transition" (press release, 9 August 2023)<www.beehive.govt.nz/release/empowering-kiwis-have-say-energy-transition>.
Gavin Lister “Nature in the Sublime. Mokihinui” Isthmus https://isthmus.co.nz/project/mokihinui/.
Lynda van Kempen “Meridian Ditches Project Hayes” The Otago Daily Times (online ed, Central Otago, 2 February 2012).
Ezekiel Hudspith “The Natural and Built Environment Act is here – so now what?” (17 August 2023) Dentons-Kensington-Swan <https://www.dentons.co.nz/en/insights>.
Anthony Doesburg “Plug pulled on tidal turbine projects” The New Zealand Herald (online ed, Auckland, 6 November 2013).
“The RMA Consent Process” New Zealand Wind Energy Association
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“How Much Does It Cost to Start an Offshore Wind Farm Feasibility Study and Launch?” FinModelsLab <https://finmodelslab.com/blogs/startup-costs/offshore-wind-farm-feasibility-study- startup- costs#:~:text=In%20summary%2C%20the%20cost%20of,on%20the%20various%20factors%20involv ed.>.
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<https://www.transpower.co.nz/cook-strait-cpz-cable-protection-zone>.
Aloys Nghiem and Iván Pineda “Wind energy in Europe: Scenarios for 2030” (September 2017) Wind Europe <https://windeurope.org/wp-content/uploads/files/about-wind/reports/Wind-energy-in-Europe- Scenarios-for-2030.pdf.>.
“Does Offshore Wind Affect Marine Life?” (16 June 2022) Sinay Maritime Data Solution
<https://sinay.ai/en/does-offshore-wind-affect-marine-life/>.
Sorren Keller “Procedures and Permits for Offshore Wind Parks” (2016) Danish Energy Agency
<https://ens.dk/en/our-responsibilities/wind-power/offshore-procedures-permits>.
Marine Scotland "Marine Scotland Consenting and Licensing Guidance For Offshore Wind, Wave and Tidal Energy Applications" (2020) Scottish Government <www.gov.scot/collections/marine-licensing- and-consent/>.
Australian Government Department of Climate Change, Energy, the Environment and Water, “Establishing Offshore Wind” <https://www.dcceew.gov.au/energy/renewable/establishing-offshore- infrastructure>.
Beehive New Zealand Government "Supercharging decarbonisation & transforming the energy system" (press release, 16 May 2022).
Stephanie De Groot "Enabling offshore energy: A balance between certainty of investment and environmental risk” MinterEllisonRuddWatts (28 July 2023)
<https://www.minterellison.co.nz/insights/enabling-offshore-energy-a-balance-between-certainty-of- investment-and-environmental-risk#:~:text=The Ministry for Business%2C Innovation,be in place by 2024.>
H Other Resources
“National Policy Statement for Renewable Electricity Generation” (14 April 2011) New Zealand Gazette.
Email from the New Zealand Wind Energy Association to the Ministry of Business, Innovation and Employment regarding the Enabling Investment in Offshore Renewable Energy Discussion Document (April 2023).
Geoffrey Palmer “The Resource Management Act - How we got it and what changes are
being made to it” (address to Resource Management Law Association, New Plymouth, 27 September 2013) at 2.
Andrew Dorrington Boyle “The National Development Act 1979: A Critical Analysis” (M.A. Thesis, Massey University, 1986).
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