$8 billion offshore wind farm proposed for Victorian waters | RenewEconomy

$8 billion offshore wind farm proposed for Victorian waters

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Melbourne company unveils ambitious plans for 2GW offshore wind farm off Gippsland coast, in what would be an Australian first.

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Plans for what could be Australia’s first offshore wind farm have been unveiled, revealing an ambitious proposal for an $8 billion, 2GW, 250 turbine project off the coast of Gippsland in Victoria’s east.

The project, which was being presented to a state government New Energy Technology Roundtable on Friday, is the brainchild of five-year old Melbourne-based renewables outfit, Offshore Energy – headed up by veteran wind energy executive Andy Evans and the former chief of geothermal hopeful Petratherm, Terry Kallis.

OffshoreEnergyStarOfSouth

Dubbed the Star of the South Energy Project, the wind farm is currently at a the very early, pre-feasibility stage – and the feasibility, alone, will be a three-year process. But it appears to have the state government on side.

In a statement on Friday, energy and environment minister Lily D’Ambrosio said the government had welcomed the plans and was working with Offshore Energy to progress them.

Offshore Energy, meanwhile, says that it is in advanced discussions with local and international investors with experience in offshore wind development and large-scale renewables investment, and has commenced a comprehensive and “sincere” stakeholder engagement process.

The company is also believed to have fostered a healthy relationship with the Clean Energy Finance Corporation over the past few years, as the cost of the technology comes within reach of the green bank’s investment mandate.

In terms of the resource, preliminary analysis of the proposed site off the coast of Gippsland shows high-capacity for reliable power generation. If built, the Star of the South is expected to deliver around 8,000GWh of electricity per year, which is around 18 per cent of the state’s current power usage, or enough to power 1.2 million homes.

The proposed site is also neatly located alongside existing transmission infrastructure in the Latrobe Valley, where the Hazelwood coal-fired power station has just been closed down. Although under-sea cabling will need to be installed to connect the wind farm to the network.

Offshore Energy managing director Andy Evans – who in his former role at Acciona helped build the Waubra wind farm – said that offshore wind’s natural high capacity factor and more constant generation made it a potentially important ingredient in Australia’s transition away from fossil fuels.

“When placed in the right wind conditions like those off the coast of Gippsland, offshore wind delivers a high, consistent flow of electricity,” Evans said in a statement on Friday.

But whether offshore wind can compete on cost is another question. Like onshore wind and solar, the levelised cost of generation from offshore wind has been on a downward slide – just not quite as steep or quick a slide as its onshore rivals.

offshorewind copy 3

Some of the world’s cheapest offshore wind farms include the Danish Kriegers Flak, a 600-megawatt project built by Sweden’s Vattenfall in the Baltic Sea, about 15 kilometers off the Danish island Møn. Kriegers Flak. The state-owned Vattenfall bid €49.9 per megawatt-hour ($A75.8/MWh) to develop it in November last year.

And in July 2016, Dong Energy was awarded the contract to build the 350MW Borssele 1 and 2 offshore wind farms off the coast of the Netherlands at a price of €72.70/MWh ($A108/MWh).

But at the end of 2016, the average cost of offshore wind remained at around $126/MWh, compared to $A60/MWh, which was the stunningly low price Origin Energy recently paid for a long-term power purchase agreement for the 530MW Stockyard Hill Wind Farm in Victoria.

Speaking with RenewEconomy on Friday, Evans said he was confident his company’s project would be competitive with land-based solar and wind, particularly considering its timing, which puts construction at around five years away.

“It’s only been in the last five months that offshore wind has begun being considered as a viable concept (in Australia),” Evans said. In another five years’ time, he said, projects like his company’s would be using markedly more efficient turbines, at between 12-15MW in size, bringing the costs even further down the curve.

“Even on current cost, offshore wind provides a new and exciting option for Australia’s energy capacity and security,” he said. “We expect technology and installation costs to continue to come down.”

Evans said that the cost of connection for the wind farm was included in the $8 billion figure that is currently being cited for the job, and at only around 25km in length, the undersea cable was not expected to be too great a cost.

offshore energy project

On the subject of community consultation, Evans said that he would be drawing on his experience building onshore wind farms with Acciona. He said one of the company’s main jobs was to educate the community, this being the first such project proposed for the state.

On the upside for locals, the offshore wind farm is expected to generate investment of around $8 billion, create 12,000 jobs during the construction phase and 300 ongoing operational and maintenance jobs.

Evans says this gives the project the potential to play a major role in transitioning the Gippsland economy, while also putting downward pressure on wholesale electricity prices, and improving local energy security.

“Our project provides an opportunity for Australia to meet a number of energy security, economic and environmental objectives and, importantly, creates large and sustainable opportunities for the
local community,” Evans said.

For its part, green group Friends of the Earth has welcomed the proposed project as a vote of confidence for the Andrews government’s yet to be legislated Victoria Renewable Energy Target (VRET).

“Big ideas like this show the 5,400 Victorian Renewable Energy Target is already attracting investment to Vic,” said Pat Simons, Friends of the Earth’s renewable energy spokesperson.

“It’s clearly time for the Andrews government to legislate the VRET so we can kick off a boom in renewable energy jobs and investment across the state.”

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9 Comments
  1. George Darroch 3 years ago

    Good on them, if they can do it. And good on them for engaging the community early, which is crucial to acceptance and local ownership.

  2. Bristolboy 3 years ago

    I am still uncertain whether the economics of offshore wind will be able to compete in Australia with other technologies. Europe is the leader in offshore wind, yet even here it is generally more expensive than onshore wind. By comparison, Australia has no existing offshore wind industry (therefore no existing skills/infrastructure to help with cost reductions) and lots more availability for onshore wind farms.

    However, the economics may be able to stack up for the developers if they are able to access subsidies to get the industry off the ground in Asutralia – possibly such as those recently awarded in Maryland, America which were tied to job creation.

    • Brunel 3 years ago

      It is sunny in AUS, Dubai, India, Chile.

      I am pretty sure that solar is the way to go in sunny nations along with cheap batteries.

      The Snowy Hydro scheme can be used to provide power when the sun has not shone for the preceding 24 hours.

  3. DJR96 3 years ago

    Off-shore wind is really only viable when you’ve got the right gear to install it. That will mean a big jack-up barge and crane. It is moving that massive crane around that costs money on land. On water it is easy. And the jack-up platform is the legs for stability, immunity from the ocean while it’s working. Great bit of engineering.

    Meanwhile, what are your thoughts on wind installed on the eastern side of Moreton and North Stradbroke Islands? Can even use existing connections to the mainland.

  4. Gordon Hervey 3 years ago

    Floating, with slack tethers like the world’s largest turbine unveiled off Fukushima would ensure the project’s future-proof.

  5. Brunel 3 years ago

    $8 billion?

    For that they can get a gigafactory built in AUS.

    Which would allow electricity to be stored cheaply. And solar power stations to make electricity cheaply.

  6. Patrick Comerford 3 years ago

    This area lies smack in the middle of Esso/BHP Bass strait oil fields which are mature now by any measure. There is plenty of sea of relatively shallow water between the Gippsland coast and the closest of the offshore platforms which from memory was Barracuda and they basically run NNE parallel to the coast. I can attest to the quality and consistency of the SW winds throughout the winter and the SE winds in the Summer so there is good wind power available all year round. There are fantastic local facilities there from oil field construction and supply terminals to numerous installed pipelines. The whole region has a wealth of skilled workers with offshore experience and the engineering wherewithal to make it happen. Very logical and beneficial project.

  7. Joe 3 years ago

    The Liberals The Wind Commissioner will say…..NO.

  8. Greg Hudson 2 years ago

    ”If built, the Star of the South is expected to deliver around 8,000GWh of electricity per year, which is around 18 per cent of the state’s current power usage, or enough to power 1.2 million homes.”

    So, in reality, Victoria really needs 40TWh/year to cover the closing of all the CFPS’s in the Latrobe Valley? That’s a $40b investment, 10GW (requiring 1250 turbines), and a much fatter cable running under the sea to Hazelwood power station. Use some of the $trillions sitting in super funds to finance it, and off we go to the elimination of brown coal use in Australia… and a source of income for the power station workers (that is the ones that didn’t take the $300k redundancy from the Hazelwood closure)

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