NSW targets offshore wind projects as it seeks proposals for Illawarra renewable zone

The NSW government hopes to attract some of Australia’s first offshore wind farms to power the state’s steelmakers as it opens up registrations for the Illawarra Renewable Energy Zone.

State government authority EnergyCo issued the call for ‘registrations of interest’ for the Illawarra REZ on Thursday, which is likely to drive the decarbonisation of the region’s heavy industry and kick-start large-scale production of green hydrogen.

The proposal for an Illawarra-based Renewable Energy Zone was created as part of negotiations around the passage of the NSW government’s Electricity Infrastructure Investment Act in 2020.

Several independent MPs pushed for the inclusion of additional regions as hosts of new Renewable Energy Zones, helping the legislation secure near-unanimous support when it was passed by the state parliament.

The ROI process is being managed by EnergyCo, a government authority created under that legislation to oversee the implementation of New South Wales’ renewable energy zone plan.

While the NSW government says there are no set targets for the amount of generation and energy storage capacity that may be hosted within the zone, EnergyCo says the Illawarra region, located just south of Sydney, is an ideal spot for renewables and is likely to attract interest from some of Australia’s first offshore wind projects.

“The Illawarra region contains unique features that make it an ideal location for a REZ,” EnergyCo says.

“The region already hosts major energy, port and transport infrastructure, has a skilled workforce, has the potential to utilise existing dams for pumped hydro, harness significant offshore wind generation and has strong demand for future hydrogen projects, including for future green steel production.

“Two separate 2-gigawatt offshore wind projects have been proposed off the coast of the Illawarra, which could connect to existing infrastructure to generate affordable, clean and reliable electricity.”

BlueFloat and Energy Estate are jointly progressing plans for a 1,600MW offshore wind project, off the coast of Wollongong, with OceanEx is also planning the nearby development of a 2,000MW offshore project.

Energy Estate’s Simon Currie told RenewEconomy that the company was “very excited” about the prospect of creating a clean industrial precinct in the Illawarra – making it distinct from other zones being established by the NSW government – using new supplies of renewable energy to decarbonise major industries.

“Everyone has to look at the Illawarra as a different REZ to the others, this is an ‘industrial REZ’,” Currie said.

Currie added that offshore wind was likely to be the preferred option for new generation capacity to supply the Illawarra.

“You’re not going to get new renewables at scale onshore, because of the prospect for opposition and challenges to development in the Southern Highlands.

“But is a transition play, it is an enormous opportunity for a clean industrial precinct.”

While other zones, including the New England and Central West Orana zones, will support the construction of new wind, solar and storage projects in regional parts of the state, the Illawarra zone will be co-located with many of the state’s major energy users.

“The Illawarra is a diverse region with a mix of coastal, rural and urban environments and industrial precincts,” the documents say.

“The Illawarra REZ will ensure the region has a key role in a renewable energy future, powering existing industries and supporting economic growth, including emerging technology in green hydrogen, ammonia and metal production.

“The Illawarra REZ will utilise rehabilitated industrial land, port and transport infrastructure, and local skilled workforces to help drive a 50 per cent reduction in emissions by 2030 under the State’s Net Zero Plan.

“The work of EnergyCo in developing the REZs will also support the implementation of the NSW Hydrogen Strategy, which will produce some of the cheapest green hydrogen in the world.”

The NSW state government has already committed funding to support EnergyAustralia’s plans for a dual-fired gas and hydrogen power station – Tallawarra B – and $70 million in funding to kick-start a green hydrogen industry.

Steel producer Bluescope, which has a significant presence in the Illawarra, is also actively investigating the use of green hydrogen in its steelmaking operations.

Previous ROI processes have seen the NSW government inundated with interest, with more than $100 billion worth of projects submitting proposals for the Hunter and Central Coast renewable energy zone.

There was a similarly “overwhelming” responses to the New England and Central West Orana zones, and grants for pumped hydro energy storage projects.

Registrations of interest for the Illawarra Renewable Energy Zone will be open until July 22 and will precede a process of community and industry consultation.

“Submissions will be used to inform the best timing, capacity, design and location of the Illawarra REZ in conjunction with ongoing stakeholder and community consultation,” EnergyCo says.

“This includes consideration to existing primary-land uses, local priorities, existing economic activity and social values.”