Offshore wind developers urge a speedy announcement about which will receive a licence

Offshore wind power developers say the government must reveal now which are getting a licence so they can prepare investment plans as a logjam for equipment intensifies.

The federal government must reveal which projects have been awarded a development licence to build offshore wind projects in Gippsland urgently, developers say, as would-be projects struggle to plan investment decisions and fret about potential delays in sourcing equipment.

The federal government has said it has earmarked six projects for a so-called feasibility licence to develop in Gippsland, which the industry sees as central in replacing the lost capacity of coal.

While developers have welcomed the progress, some are concerned that another six projects have moved to a process to resolve boundary disputes, potentially delaying a final decision on who will be awarded the licence.

A final decision could come as soon as February, although a prolonged boundary dispute could drag out the announcement.

Feasibility licences give projects exclusive rights over a part of the region for seven years, which is critical for attracting investment, and developers have stressed they can’t plan without certainty.

Developers, which declined to comment on the record for fear of missing out on a licence, said they would not begin preliminary work until being awarded a licence as there was a growing logjam for equipment.

The US, Europe and China are rapidly expanding their offshore wind industries to meet decarbonisation targets, and industry executives fear Australia could be left behind.

Delays to projects in Gippsland would be a serious blow to Victoria specifically.

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.

The NSW market remains appealing, with the state also likely to need offshore wind with a plethora of infrastructure – most notably transmission lines from retired or retiring coal power stations – that could be reused. But with the need for floating turbines, and signs of social opposition, demand to build in NSW is much smaller.

The Australian understands only eight projects submitted applications to build in NSW’s Hunter Region, well down on the 37 applications lodged in Victoria.

Victoria has significant advantages. Its coastline is ideal and winds are 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 used in deeper waters.

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, which will bring likely state and federal sweeteners for developers. 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.