Offshore wind a massive opportunity for green hydrogen, D’Ambrosio says

Victoria’s state government expects its new offshore wind mandate – for 9GW of installed capacity by 2040 – will create “fantastic” opportunities for green hydrogen in the state, as well as being crucial for replacing brown coal generation and other fossil fuels.

Victoria became the first state in the country last week to set an offshore wind target. There are currently no offshore wind farms at all in Australia, but there are nearly 20 different project proposals from local and international companies and consortium.

See RenewEconomy’s Offshore Wind Farm Map of Australia

The Victorian goal is to have the first generation delivered by 2028, with a target of 2GW by 2032, 4GW by 2035, and 9GW by 2040, suggesting a rapid acceleration after the first massive turbines are installed.

“It’s a necessary part of the next evolution in terms of decarbonising our electricity system, but also potentially creating fantastic opportunity for green hydrogen production,” state energy minister Lily D’Ambrosio in an interview on the latest episode of RenewEconomy’s popular Energy Insiders podcast.

“So, we know, of course, with Victoria, you know, we’ve got a lot of onshore wind, we’ve got a lot of onshore solar, they will continue to be built.

“But we know that there is massive capacity that we’ve got here off the coast of Victorian, can I say that Victoria has the best offshore wind resource in the country and amongst the top five, if not the top three in the world.

“So why wouldn’t you do it here in Victoria, making the targets, as part of the announcement is really important for confidence for industry, knowing that they’ve got a government that will back them in their sector.”

Victoria was likely to get its first offshore wind farm, at least the first stage of it, by 2028 in any case. That was the plan for the 2.2GW Star of the South project, regarded as the most advanced in Australia to date.

But D’Ambrosio says there are other projects also keen to get moving, and while the state has yet to release details of how it will reach the mandate – will there be underwriting agreements or auctions – it appears the plan is to have the first stages of several different projects up and running by 2032.

“You mentioned one proponent, Star of the South. But, you know, there’s at least two that we know, in addition to star of the South, that are equally excited, and really wanting to give it a red hot go,” D’Ambrosio said.

“And we’ve indeed, provided some financial support to three proponents. And they all have a keenness to move to a production phase at some point, hopefully, in the not too distant future.

Now, we want to make this a competitive process. So it’s not about one project being better than another or more advanced than another, we want to create an ecosystem to make it possible for not just three proponents to be able to go to the next step, but for more interest to come through to Victoria, and globally.

“We want those investment dollars to come to Victoria. So the more competitive environment we can have, the better.”

The government plans widespread consultation and aims to deliver an “implementation paper” later this year, which will have more information about the nature and timing of the mechanisms.

As for green hydrogen, D’Ambrosio said the costs were coming down (as they would with offshore wind farms), and the Russian invasion of Ukraine was likely to accelerate investment in that sector.

“Knowing that we’re going to have a fantastic offshore wind resource producing energy clean energy, off the  Gippsland coast, and off the Portland area, will mean that it will give them a really strong indication of where they could potentially locate their investment, their electrolyzers and other businesses that rely on a clean source of hydrogen?” she said.

“I’m sure that this will start to get a lot of meetings going and a lot of dialogue going about where green hydrogen projects can be located in the state.

“That’s not to say that can’t be located elsewhere. But there are natural advantages of having green hydrogen production and storage available as close as possible to where offshore wind resources generating power.”