The federal government has launched a consultation process to seek input from stakeholders and industry on potential new regulatory powers for offshore wind farms in Australia.

Wind farms that are to be constructed more than 3 kilometres from shore will fall into Commonwealth waters, meaning the federal government will have responsibility for their regulation.

The Department of the Environment and Energy has issued a consultation paper, seeking feedback from stakeholders on a potential regulatory regime.

Part of the proposed process would see the federal energy minister, currently Angus Taylor, granted decision making powers to approve, or place conditions on, a proposed offshore wind farm.

It would effectively provide the federal energy minister with veto powers over a proposed offshore wind farm in Commonwealth waters.

The intention of the regulatory regime is to ensure the development of offshore wind farms occurs in suitable areas, ensuring that the operation of the wind farms allows the continued use of the oceans for necessary maritime navigation, and is compatible with measures under environmental protection and biodiversity laws.

The department proposes to use the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), to serve as the federal regulator of offshore wind developments.

The federal energy minister would be required to make a formal “declaration” of the suitability of an offshore site for a wind farm under the proposed regulations.

“The declaration stage is designed to identify and prevent potential conflicts in competing interests, and set conditions before a project could progress, such as key stakeholders and consultation requirements, constraints on types of activities, as well as other conditions the Minister considers appropriate,” the consultation paper says.

The department proposes to establish a “commercial licence” that is granted to projects, providing them exclusive access to a region for an offshore wind development for an initial period of 30-years.

Projects would be required to establish a bond, to set aside money for the decommissioning of the offshore wind farm once it had reached the end of its operational life.

“The bond amount will be calculated in accordance with an appropriate method as agreed with the regulator as part of the management plan. Decommissioning bonds are expected to equal the amount it would cost government to decommission all infrastructure should the licence holder fail to meet its decommissioning obligations,” the consultation paper says.

The minister would also have powers to grant a permit for the construction of transmission infrastructure, that would allow electricity generated by an offshore wind farm to be sent back to the mainland.

Australia has yet to see its first offshore wind farm, but there are a growing number of proposals to see them become part of Australia’s renewable energy ecosystem, including the massive Star of the South proposal.

Lead by Offshore Energy, which was formed under the leadership of CEO Andy Evans, formerly of Acciona, proposes to construct 2,000MW of offshore wind generation capacity off the coast of Victoria.

In November, the Star of the South project announced that it had commenced exploratory testing off the south coast of Gippsland in Victoria

The development of offshore wind farms in Australia has lagged behind developments overseas, due to higher construction costs and the availability of high-quality on-shore wind sites across Australia.

However, interest in offshore developments have grown, with projects able to achieve greater scale through larger turbines and higher generation yields.

The department will also hold two information sessions, on 10 February in Perth and 20 February in Melbourne, to undertake further consultation.

Interested parties have until 28 February to make a submission.