Chapter 10: Decommissioning
Approximately 20 submitters commented on issues relating to decommissioning of offshore renewable energy infrastructure.
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Decommissioning obligations
The discussion document proposed that the party who constructs and operates an offshore renewable energy infrastructure should be responsible for ensuring this infrastructure is decommissioned at the end of its useful economic life and should be responsible for meeting the costs of decommissioning activity. The discussion document sought feedback on whether developers should be required to submit a decommissioning plan, financial security and a cost estimate based on the full removal of the infrastructure. In relation to the financial security, the discussion document sought feedback on a range of design options relating to financial security, including the timing of lodgement, key assumptions to be factored into the security value, and acceptable forms of financial security.
Most submitters were supportive of a decommissioning plan, cost estimate and financial security being provided at the commercial permit stage. A few individual submitters proposed alternative approaches such as remediation bonds like those used for Tiwai Point; a general decommissioning fund built up via a levy; and assessing the decommissioning plan as part of the environmental consents process instead.
Most submitters supported that the cost estimate should be based on the assumption that infrastructure is fully removed during decommissioning. However, many submitters noted it was important that the regime provides flexibility to determine the most appropriate approach at the time, which could include partial removal.
Most submitters supported financial securities building up over the course of the commercial permit. Industry submitters highlighted the financial burden if the security had to be provided up front because it would reduce the amount of capital available for development. Many of these submitters suggested that financial security should start low and increase once infrastructure is in place and revenue is generated. Some industry submitters emphasised the importance of taking a proportionate and risk-based approach to financial securities that balances any risks to the government with the costs to the developer. Some submitters also acknowledged that there is a degree of risk during the construction phase that may warrant some degree of security being required at that point, despite commercial incentives to get infrastructure operational.
Timing of assessing decommissioning capability
The discussion document sought feedback on what should be provided by developers in relation to their decommissioning plans at the feasibility application stage.
Nearly all submitters agreed that neither a full decommissioning plan nor financial security should be required as part of the feasibility permit application. However, some submitters acknowledged that, for a rounded assessment to take place at feasibility, the application should include some consideration of decommissioning. Various submitters suggested that either a high-level indicative plan should be assessed, or a capability assessment undertaken, at the feasibility permit application stage.
Ongoing monitoring
The discussion document sought feedback on regular and ad hoc reporting and assessment requirements to ensure the decommissioning plans, cost estimates and financial security remains suitable over the life of the development.
In response to the discussion document’s proposals on reporting and assessment requirements relating to decommissioning, submitters generally agreed with the need for regular monitoring, but were divided on the appropriate time period between reviews. Responses ranged from annual reviews to reviews every 10 years. Some submitters said that review periods should become more regular as decommissioning approaches. Alternatively, some industry submitters suggested that reviews could be triggered by material ad hoc changes to the decommissioning plan and financial security, and that regular assessments should only take place if requested by the permit holder or the regulator.
Opportunities for re-use and repowering infrastructure
The discussion document sought feedback on ways in which the regulatory regime could encourage the refurbishment of infrastructure or the recycling of materials.
Views on recycling varied. Some submitters indicated that existing commercial incentives would be enough, while others said that the government could provide support through mechanisms such as grants, or by coordinating supporting infrastructure.
Alignment with decommissioning obligations in the environmental consents regimes
The discussion document sought feedback on 2 issues regarding the relationship between the proposed permitting regime and the existing environmental consents regimes. Firstly, whether it would be appropriate for a second decommissioning plan to be provided to the consent authority to assess the environmental impacts of decommissioning. Secondly, the proposal that the offshore renewable energy permitting regime would focus on the financial capability of the permit holder to decommission, while decommissioning plans under environmental consent legislation would focus on the environmental impacts of decommissioning.
Most submitters agreed that a detailed decommissioning plan focused on environmental effects of the activity should be provided to the environmental consenting authorities for approval. Submitters cited the importance of decommissioning planning reflecting both economic and environmental impacts and argued that environmental consenting authorities are best placed to assess environmental considerations. Some submitters raised the potential for duplication between the permitting and environmental consent processes and emphasised the importance of minimising overlap between decommissioning processes as much as possible. While some submitters were supportive of decommissioning planning and assessment taking place as early as possible in the lifetime of the project, others noted that it would be more effective and accurate for these plans to be assessed closer to the start of decommissioning.