The long-awaited Offshore Renewable Energy Bill passed its third reading on 30 June 2026 and the Offshore Renewable Energy Act 2026 came into force last week ("the Act"), marking a significant step in the potential development of an offshore renewable energy sector in New Zealand. The Act establishes a permitting regime to facilitate the development of offshore renewable energy projects.
The Select Committee amendments (discussed in our previous July 2025 article) have been adopted in the new Act. These are generally positive developments, providing greater clarity, flexibility and certainty for Offshore Renewable Energy ("ORE") participants. In particular, the Act as passed includes a framework to enable the management of competition between ORE and non-ORE activities, with the applications of the potential projects to be determined by the relevant responsible Ministers.
The Government has deliberately aligned many aspects of the regime with Australia's Offshore Electricity Infrastructure framework which reduces regulatory learning costs, legal uncertainty, transaction costs and developer risk. It also allows Australian developers and supply chains to expand into New Zealand more easily.
One key issue for ORE developers has however remained outside the scope of the Act: Their broader question of the availability from the government of price risk mitigation mechanisms (such as contracts for difference) for the ORE sector.
Managing competition
The Select Committee report identified the treatment of competing offshore commercial activities as the key issue arising from the Act, ie how, and to what degree, should non-ORE projects be restricted in areas that are subject to ORE permits.
To this end, the Act has now been amended to allow the Ministers responsible for the ORE regime and the Crown Minerals Act 1991 to jointly designate areas in the territorial sea or exclusive economic zone as ORE designated areas.
Within an ORE designated area:
- no new seabed minerals permits can be issued;
- existing seabed minerals permits will not be extended into the area;
- existing petroleum permits will not be extended to cover other types of minerals in the area; and
- the Minister responsible for the Crown Minerals Act 1991 may choose to defer the Minister's consideration of any undetermined minerals applications relating to the designated area.
When issuing a designation notice, the Ministers must:
- first consult with relevant iwi, hapū, and other interested parties, so that competing interests and the coordination of offshore activities can be considered; and
- comply with requirements relating to:
- the size of the designated area, ie this must be no larger than reasonably required to give certainty to developers and to manage competition or the size of any current permit in the area; and
- the period for which the designation applies, ie this must be for no longer than reasonably required to give certainty to developers and to manage competition or to allow an existing permit holder to obtain marine/resource consents.
This mechanism does not create a blanket preference for ORE over all other marine users. Rather, it is intended to address competition between ORE and non-ORE activities by creating a targeted mechanism to prioritise ORE development in areas considered suitable for that purpose. In effect, it will allow Ministers to reserve relevant marine space against certain competing seabed minerals activities while an ORE project progresses through the permitting and consenting process. While the priority given to an ORE development will be limited in scope and duration, it should still provide ORE developers with a protected pathway to assess and pursue development in designated areas.
No government financial support
Offshore wind developers have for some time been seeking to persuade the government to offer mechanisms that would reduce pricing risk for projects, for example through government-provided contracts for difference. The current Government has however maintained that such mechanisms would be a material departure from the market-based electricity model in New Zealand and has signalled broadly that the Crown is not considering subsidies for ORE projects.
Accordingly, the Act focuses on permitting and developers are left to develop their own commercial solutions to power price risk.
Future-proofing
It will be interesting to see whether projects under the Act are dominated by offshore wind developments, or whether the legislation will be sufficiently technology-neutral and flexible enough to accommodate other developing technologies such as wave, tidal, offshore solar and/or others.
Conclusion
The Act provides a regulatory pathway for the grant of both feasibility and commercial permits, improves the framework for managing competing offshore commercial uses, and gives investors and developers greater certainty around how projects will progress from site assessment through to development. While the absence of government-backed pricing mechanisms remains a material consideration for investors in the sector, the Act nonetheless provides the regulatory framework within which ORE projects may now be progressed, and allows investors and developers to move their focus to the practicalities of establishing an ORE project, such as supply chain capability/capacity and transmission capacity.
The Act aligns with a broader shift in New Zealand energy policy to increase electricity generation, improve energy security, encourage private investment and reduce barriers to renewable infrastructure.