Offshore wind; sliding into the DMS of Australia’s energy market soon

With the conclusion of this week’s Wind Energy Australia conference, Andrew Taylor, Principal Environment Consultant, discusses some of the challenges and opportunities surrounding the emerging offshore wind industry in Australia.

This week we saw Xodus’ very own Rebecca Hewlett, Director of Renewables and Environment, speak at the Wind Energy Australia conference about optimising the business model for offshore wind. It is clear we are at the beginning of a challenging and exciting journey which will see Australia transition to clean energy. We are yet to see the role that offshore wind will play in the transition here in Australia, but we are closer now than we have ever been to offshore wind projects becoming a possibility from a commercial, technological and environmental perspective.

Historically, Australia has heavily relied on fossil fuels for energy supply, particularly petroleum products and coal. Data from the Australian Petroleum Production and Exploration Association has, for many years, shown a longitudinal decline in exploration for new oil and gas resources. While aggregate Australia-wide production is at its highest level ever, sustaining this performance will eventually require new discoveries, which will rely on exploration. This is combined with the expectation that many of Australia’s coal-fired power stations will close in late 2020s, including a reduction of 44 per cent by the end of the decade. Australia’s energy security will need to depend on a diverse range of energy supply options and, in line with widespread coverage from the IEA and IPCC, options that move us towards a lower carbon intensity.

Poised to potentially slide into the DMs of the Australian energy market is a cool 25 gigawatts of capacity from offshore wind projects. These proposed projects are located in Western Australia, South Australia, Victoria and Tasmania, with work by the Blue Economy CRC showing theoretical potential in most jurisdictions, other than the Northern Territory.

The Offshore Electricity Infrastructure Bill 2021 is a critical enabler of these proposals and clearly signals that the winds of change are blowing offshore Australia. This new interest in Australia’s offshore renewable sector, particularly wind, reflects an energy market in clear transition. 

While the legislation will need to be supported by regulations, guidelines and industry practice, it will provide the fundamental ingredients to legally provide for the development of offshore wind projects. The National Offshore Petroleum and Safety Environmental Management Authority (NOPSEMA) will be the entity responsible for regulating these developments. 

Offshore wind is a huge opportunity for Australia. Embracing a well-proven renewable technology has enormous potential economic benefits for the country. As an example, the growth in renewables correlates well with many oil and gas operations moving from late life through to decommissioning. This presents significant opportunities for future jobs for the workforce and it’s why we launched X-Academy, with support from ETZ Ltd, bp and EnBW, to transition people from traditional to emerging energy sources. Creating jobs from renewable projects will be key to the sector’s economic narrative and, ultimately, community and political support.  

To maximise the opportunity of offshore wind, collaboration will be an important enabler of industry development. Based on work we have undertaken to-date, there is an overlap in requirements for port and harbour facilities between oil and gas decommissioning and emerging offshore wind projects. There is an opportunity for shared investment to develop common user facilities which supports both industries, including for services such as installation, inspection, maintenance, repair and removal. 

Similarly, sharing lessons learned across industries, on issues like the influence and rate of material degradation in Australia’s oceans, is in everyone’s interests. Demonstration of capability to maintain and manage structural integrity of offshore assets has been a strong interest of NOPSEMA for a number of years. Proponents should give early consideration to how they will give NOPSEMA confidence in their management systems.  

Minimising the impact on stakeholders will also be key. The Southeast of Australia, including Victoria and Tasmania, includes a diverse range of stakeholders. There are long standing commercial and recreational fishing interests in the region and additional interests from conservation groups. Collaboratively managing interactions between potential marine traffic across industries, particularly for large-scale construction activities, will support improved stakeholder relations.

Potential development barriers ahead of Australian proponents have been faced elsewhere, and we should absorb as many learnings as possible from other jurisdictions, such as Scotland and the United States. Examples of these challenges include uncertainty around the permitting process, as both industry and regulators test the implementation of legislation, and the development of an efficient and robust supply chain.

Xodus is actively engaged in working through many of these issues in the UK, US and Australia. Our operating model draws on extensively experienced renewables experts, coupled with local insights, to inject decades of experience into emerging markets to support rapid acceleration of projects.

We are excited about the potential of offshore wind in Australia. We believe it provides an incredible opportunity for Australia to translate its natural advantage into commercial return, as well as supporting the energy transition. 

Developing these projects will be complex and challenging, We know this because we have been designing, approving and building these projects overseas since the very beginning. But what we also know, is the size of the prize is worth It, both commercially and for society. This is a challenge we are ready to help you with because, together, we will deliver a responsible energy future