The federal government must stop “simply providing paperwork” and lean in as a partner on offshore wind, says Victorian energy minister Lily D’Ambrosio.
With the federal election in the rearview mirror, D’Ambosio says the federal government has made some important moves around offshore wind regulations for Commonwealth-governed areas – despite being delayed by a year – but more is needed.
“It’s now time for the Commonwealth to do things beyond simply providing paperwork, and actually start to seriously lean into how they should be a partner in delivering first offshore wind energy projects for the country,” she told the Australian Offshore Wind Industry Forum in Melbourne on Tuesday.
“No other jurisdiction globally develops these things up without national national jurisdiction involved, and that’s where we’re up to right now.”
One of the key action points D’Ambrosio is hoping the federal government will lead on is around what comes after the capacity investment scheme (CIS) ends in 2027.
She says an expert panel is developing a market mechanism as a replacement and she is “arguing very strongly” for it to account for higher cost technologies, such as offshore wind, and very long duration energy storage.
“For a mechanism to not include those, I think, is yet another missed opportunity, because we’ve been down this road before,” she said.
“We were supposed to have a post-2025 market reform… That’s not to say jurisdictions shouldn’t consider having direct roles in how they can facilitate the build of some of these technologies, but you’ve got to start with a mechanism that actually does contribute to some of the heavy lifting that’s needed.”
National targets for offshore wind, while welcome, come under the category of ‘paperwork’.
The head of Southerly Ten, the company behind Australia’s most advanced offshore wind farm Star of the South in the ocean around Gippsland, pushed back against waiting for national targets on offshore wind, suggesting the country should “just back our winner, which is Gippsland”.
“I think we’re trying to orchestrate the perfect and make it the enemy of the good. It’d be great to have a national target. That’s a really great idea. But you know, if we get caught up in federal processes or state processes… they take a long time,” says Southerly Ten chief Charles Rattray.
“Offshore wind Victoria is a completely different product to offshore New South Wales, floating and fixed bottom are working at orders of magnitude different costs.
“Why would we slow Victoria down while the feds make a decision on how to sponsor things nationally?
“To have offshore winds deliver the most clean energy as possible, let’s just back our winner, which is Gippsland, and do everything we can to make sure Gippsland works. And then let’s worry about everything else.”
Victoria designing offshore in Australia
Victoria is leading the development of offshore wind processes in Australia, with an auction to award projects with a contract-for-difference (CfD) and an availability payment by October this year.
It was kicked off with a confidential Registration of Interest (ROI) process for feasibility licence holders that closed in May.
A CfD is a common government support mechanism for driving early renewable energy development, by providing a generator with a fixed price for electricity over a set period.
The federal Labor government awarded 12 feasibility licences to offshore wind projects proposed for the Gippsland declared zone and one feasibility licence for the Southern Ocean zone, last year. (Shown on the maps below)
Gippsland zone and feasibility licence holders, above, and Southern Ocean zone and feasibility licence holder, below. Source: Victoria government.
The auction process itself was designed by Offshore Wind Energy Victoria (OWEV) and is currently being fine-tuned, says executive director Anh Mai.
With up to 13 bidders in the first auction, she hopes that proponents won’t be put off bidding in future auctions if they’re unsuccessful in the first.
“I do hope that people can see if they’re not successful in the first round, there will be further rounds,” she told the forum.
“The first round is exciting. It will be the first one ever, and then we want to repeat and repeat and repeat.”
Victoria is the only jurisdiction in Australia to set a target for offshore wind, aiming for at least 2 gigawatts (GW) by 2032 and ramping up to 9 GW by 2040.
You’ve got us to thank
The federal election waved in a new normal of expectations for governments, with communities wanting to “get things done”, D’Ambrosio says, while also claiming credit for the country’s renewable energy trajectory.
“if Victoria hadn’t gone and done a whole lot of things to promote renewable energy, then I would argue that probably the whole country would not be in the strong position it is now in terms of transition,” she said.
“Having said all of that, between now and 3035, Victoria needs to develop an additional 25GW of new [combined] generation [and] storage and that’s because our electricity demand will go up by half.”
The state government is predicting that need will create 67,000 new jobs – a challenge in its own right in finding and training people to do them.
See also: Tracking coal and displacing gas: Offshore wind developers say they can blow hard at the right time
And: Energy Insiders Podcast: Offshore wind gets ready for auction
