Analysis-Australia – A land of promise and hurdles for offshore wind developers

Analysis-Australia – A land of promise and hurdles for offshore wind developers

by Sonali Pol

MELBOURNE (Reuters) – Under a new government, Australia is poised to be the next big market for offshore wind developers, attracting interest from the likes of Shell (LON :), Denmark’s ร˜rsted (OTC ๐Ÿ™‚ and Norway’s Equinor. But the industry, from scratch to the bottom, faces a large number of challenges.

After more than a decade of poor climate action under conservative leaders, the new Labor government led by Anthony Albanese has committed to net zero emissions by 2050 โ€” a target that aligns with states’ renewable energy targets.

To achieve that goal, the country will need 96 gigawatts of renewable energy by 2035, to replace coal-fired plants that are due to close, and offshore wind must be part of the mix, Shell Australia’s president Tony Noonan told Reuters in an interview.

Onshore wind power accounts for 10% of Australia’s electricity needs, but the foundation for offshore farms – which are much larger and more productive – are just getting up and running after a law setting out a framework for their development was passed late in the past. general.

However, the government moved quickly to launch a process to determine which offshore areas would be opened for licenses. The first proposed area is off the coast of Gippsland, Victoria, and a final decision is expected before the end of the year.

said Tim Sawyer, chief international officer of Flotation Energy, which has a proposed project off the coast of Gippsland.

For many in the industry, Australia could become the next boom market for offshore wind.

Lars Nordley, Equinor’s vice president of business development, said Equinor, for example, considers Australia one of its three largest markets in the Asia-Pacific region for offshore wind, after Japan and South Korea and plans to use its South Korean projects as a model for Australia. Renewable Energy in Asia and the Pacific.

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However, the sector will need new regulations and strengthened government departments to handle licensing and approvals. Industry executives said it would also have to develop the supply chain as well as the skills of workers for thousands of jobs in construction, operations and maintenance.

The projects, which typically take 8-10 years to complete, are also likely to need to overcome potential opposition from landowners worried about the transmission lines needed to connect to the onshore grid.

Community concerns about the impact of wind turbines on the lives of birds, such as orange-bellied parrots, and seals, such as fish and whales, are also expected.

“Each project will be evaluated individually to ensure that we protect our precious biodiversity while harnessing our world-class offshore winds to generate clean energy,” Victoria Energy Minister Lilly D’Ambrosio said in comments emailed to Reuters.

The industry must also attract suppliers of ships, turbines and other related technologies away from the fast-growing offshore wind markets in Europe and Asia – suppliers who might come only if there are several projects being developed around the same time.

โ€œThere are only a limited number of vessels in the world that can be used to install offshore turbines. So you need to attract these vessels into Australian waters,โ€ said Charles Rattray, CEO of Star of the South, the country’s most advanced proposed offshore wind company. . project.

Flotation Energy sees opportunities to accelerate development and reduce costs by using oil and gas assets that are nearing the end of their lives in waters off Victoria, such as ships that will be deployed to decommission oil and gas rigs.

โ€œThere are a lot of opportunities from the petroleum industry that has 50 years of heritage in the region … to participate in that and develop it into offshore winds,โ€ Sawyer said. “I’d rather not take 10 years to build a project.”

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Focus on Victoria

Shell, ร˜rsted and France’s Engie, through their Ocean Winds project with EDP Renewables, said they are monitoring the Victorian operation closely.

The state, which has led the country’s offshore wind drive, plans to buy 2 gigawatts of offshore capacity with supply by 2032, enough to power 1.5 million homes. It is also targeting 4 GW by 2035 and 9 GW by 2040.

The Star of the South project, which has a capacity of 2.2 gigawatts, has been on the drawing board for 10 years and is now mostly owned by Danish wind giant Copenhagen Infrastructure Partners, to be operational in 2028.

NSW has also sought bids for renewable energy projects for the Illawarra region south of Sydney, attracting eight 12.9 gigawatt offshore wind proposals worth A$35 billion ($23 billion).

Andy Evans, chief executive of Oceanex Energy, said, “NSW has much better options. It has a much greater demand for electricity. All coal will be shut down in the next 10 years, so you have an amazing grid infrastructure.” Southern Star co-founder.

He said Oceanex, which has lined up Equinor as a partner, hopes to start producing power off NSW by 2030.

($1 = 1.5378 Australian dollars)

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