With Australia making grand plans to establish offshore wind as part of its clean energy future, maximising the potential of Bass Strait is essential, writes Steven Geroe.
Victoria has world-class offshore wind resources located 80km to 130km off Melbourne and Geelong. The Victorian Government’s “Offshore Wind Policy Directions Paper” (PDP) targets 2GW of offshore wind capacity by 2032, ramping up to 9GW by 2040.
To date, three projects have received funding under Victoria’s Energy Innovation Fund for early stage development: Star of the South, Macquarie Group and Flotation Energy.
Two further projects off Victoria’s coast are planned by Energy Estate and BlueFloat Energy. All use fixed-platform technology in shallow coastal water along the Gippsland and Portland West offshore wind zones, and Bass Coast, southeast of Melbourne.
On 5 August, 2022, Minister for Climate Change and Energy Chris Bowen announced the beginning of a 60-day consultation period on offshore wind development in the Bass-Gippsland region, the first of six potential offshore wind zones in Australia.
To unlock the 33GW potential identified in the PDP, the much larger wind resources in Bass Strait, between the Australian mainland and Tasmania, will need to be harnessed – accessible using floating platform technology.
This will be necessary to achieve the 15-fold increase in renewable energy generation capacity required for decarbonisation of the Victorian energy sector by 2050.
At the 2022 Victorian Smart Energy Summit, former director of the Clean Energy Financing Commission, Oliver Yates, said the relative strength and consistency of offshore wind can support grid stability, with any electricity produced in excess of grid requirements to be used for production of green hydrogen.
Rapidly declining costs and proximity to major urban centres and existing infrastructure support the case for offshore wind development in the state.
The PDP indicates that if the 60GW additional solar and wind capacity required to achieve net-zero by 2050 is installed onshore, this could occupy a substantial proportion of Victorian agricultural land.
Victoria’s recognition of offshore wind as a “central plank” of decarbonisation is consistent with International Energy Agency and International Renewable Energy Agency roadmaps for net zero by 2050.
Offshore wind remains more expensive than onshore wind, however US National Renewable Energy Lab and Department of Energy research indicates offshore wind costs fell by 28-49 per cent from 2014 to 2019, far faster than predicted.
This research predicts that to 2050, the cost differential between onshore, fixed and floating platform offshore wind will continue to narrow.
While costs for floating platform projects are currently uncompetitive, Global Wind Energy Council data suggests the increasing scale of projects in the UK, Western Europe and East Asia will continue to rapidly drive down costs.
One Australian company aiming to take advantage of these trends is newly formed Mistral Energy.
The company’s managing director, Charles Jones, says to tap the potential of Bass Strait wind resources, Australian governments and firms need to be developing strategic alliances with leading European technology providers, project developers and investors.
By doing so, Australia can integrate its wind farm development with the rapidly expanding global industry.
At the same time, Australia needs to optimise its position in global offshore wind industry supply chains. This may involve local fabrication of components such as turbine towers and platforms at dockside industrial hubs.
To maximise employment and economic benefits, Australia can learn from European and US collaboration.
To compete with larger markets, such as the US, in investment for leading-edge technology and project development expertise, investors will need to be confident that Australian governments are supportive of industry development.
To date, offshore wind has not been included in the Australian Energy Market Operator (AEMO) Integrated Systems Plan to 2050, partly due to the lack of any regulatory framework.
For this reason, the Federal Government’s Offshore Electricity Infrastructure Act 2021, effective from 22 June, 2022, can serve as a game changer.
It establishes the mechanisms for feasibility licenses – which enable pegging of seascapes for testing and investigation – and commercial licences for project construction and operation, subject to meeting environmental, safety, investment and technical milestones.
The consultation process for declaring the Bass-Gippsland offshore wind zone can lay the foundation for addressing environmental concerns, the need to avoid development in marine national parks, and to take requirements of commercial fishing and shipping lanes into account.
In order to realise the potential of Bass Strait wind developments, both fixed and floating wind areas need to be declared.
Industry development can also be facilitated by long-term offtake contracts. The PDP indicates that a “competitive mechanism” will be used to support offshore wind development, possibly along similar lines to the existing Victorian Renewable Energy Auction Scheme (VREAS).
As it becomes cost competitive, a VREAS-style scheme could also support Bass Strait wind development. Mistral Energy’s Jones says for the time being, the critical steps to progress collaboration with international stakeholders are declaring areas open for wind development in Bass Strait, and granting feasibility licenses, both of which are now being addressed.
Given the long lead time, project planning and preparation – including provision for floating platform projects further offshore – is necessary so Australian firms can begin developing strategic partnerships with leading European technology providers and project developers.
Mistral Energy plans to develop more than 10GW of floating platform capacity over 10 years, beginning with a 2GW project. The projects will utilise 15MW turbines, to be manufactured serially by Vestas by 2024.
Jones believes there is potential for manufacturing the turbine towers and platforms in Victoria, along with wind turbine assembly.
Mistral Energy aims to link its main export cables to the transmission grid close to major urban centres, minimising the need for onshore overhead transmission wires. Along with reduced visibility from turbines being located further offshore, this could reduce community objections to wind power development.
As a key plank of a viable 2050 decarbonisation pathway, offshore wind should be integrated into AEMO’s Integrated System Plan with an ambitious, but realistic, time frame.
It will not be a substitute for onshore wind farms in the immediate future, but early integration of floating platform technology should be prioritised to realise the full potential of Bass Strait’s world-class wind resources.