NSW ports ‘can be panacea’ to Victoria’s offshore wind woes

The rejection of Port of Hastings’ environmental plan has stoked concern within Australia’s offshore wind industry, but a NSW port could lighten the load.

The NSW Port Kembla can fill the void left by a failure of a Victorian port to secure federal environmental approvals, according to the head of the group that manages two of the country’s largest infrastructure terminals.

The pitch by NSW Ports, which manages both Port Kembla and Port Botany, will be welcomed by Australia’s offshore wind industry – which was rocked this month when Federal Environment Minister Tanya Plibersek vetoed a linchpin of Victoria’s energy policy by rejecting a plan to use Port of Hastings as a hub for the industry due to “unacceptable” risks to local wetlands.

Australia’s offshore wind industry had warned of potential damaging uncertainty lingering over the market, with Victorian authorities likely to have to resubmit an environmental plan that Ms Plibersek could still reject.

In an opportunistic pitch, however, NSW Ports chief executive Marika Calfas said the two ports in Australia’s most populous state has some substantial advantages over Hastings.

“Port Kembla, while further away in distance from the Gippsland zone, is ahead in timing and is able to support the Gippsland offshore wind developments,” Ms Calfas said.

“Port Kembla is located within one of New South Wales’s largest industrial hubs, is home to the BlueScope Steelworks and already handles cargo for large scale renewable projects.”

The rejection of Port of Hastings environmental plan had stoked concern within Australia’s offshore wind industry, but a NSW port could lighten the load.

Ms Calfas said if commenced now, Port Kembla could be operational within five years to support the Gippsland offshore wind projects and should be progressed to avoid delays while other port locations continue to be considered.

The pitch by Ms Calfas comes as the country’s offshore wind industry urges authorities not to put all eggs into the development of Hastings.

“The industry needs more than one port to be viable and a NSW port would be useful, especially when the government is considering declaring two regions in the state open for offshore wind development,” said one senior industry source.

Federal Energy Minister Chris Bowen has already declared the NSW Hunter region as open for offshore wind development and invited public feedback on a proposal to also allow projects in the Illawarra. The public consultation process closed on November 15, but no decision has yet been announced.

But much of Australia’s offshore wind industry is laser focused on Gippsland, the first region declared open to the zero emission generation source.

Some of the world’s largest renewable energy developers and local giants last year lodged applications to develop off the coast of Gippsland, moving to capitalise on Victoria’s plan to use the zero-emission energy source as a major replacement for coal.

Six projects have been preliminarily awarded a so-called feasibility licence, and six more could be awarded the coveted prize if they are able to overcome boundary disputes with other developers.

Feasibility licences give projects exclusive rights over a region for seven years, which is critical for attracting investment.

The Victorian government in 2022 set a target of generating the equivalent of about 20 per cent of its energy needs from offshore wind within a decade. The target then doubles to 4GW by 2035 and 9GW by 2040. In all, Victoria sees potential for 13GW of offshore wind capacity by 2050, five times the current renewable generation in Victoria.

Victoria’s coastline is ideal for offshore wind. Winds are very strong and consistent by international standards, while a large area of shallow ocean less than 50m-60m deep is suitable for wind turbine platforms to be fixed to the seabed, a much more mature and cheaper technology than the floating turbines that have to be used in deeper waters.

But the rejection of the environmental plan for Hasting had created substantial anxiety for would-be developers.

Port Kembla in NSW.

The Australian understands officials contacted the would-be developers to assure them that a timetable for much anticipated contracts-for-difference – the mechanism by which generators will earn revenue – will proceed next year as planned.

Victoria is one of Australia’s most coal-dependent states. The Australian Energy Market Operator expects all coal generators to retire within 15 years, and offshore wind is seen as the only type of generation with the scale to be able to replace the traditional source of electricity.

Unsuccessful developers could move elsewhere, most notably to NSW, but many would prefer to concentrate on Victoria as it has fewer technical issues compared to Australia’s most populous state. In NSW, developers would require the installation of floating wind turbines, which remain some years behind the established technology of fixed platforms.