Offshore wind boundary disputes in focus as licence decision nears

In a sign development licences are close to being awarded, the industry’s regulator has asked wind projects competing for water rights to resolve their overlapping boundaries.

Australia’s offshore wind authorities are mulling how to resolve boundary disputes between rival projects as a decision about which will be awarded a licence approaches.

Several states, most notably Victoria, have earmarked offshore wind as critical for plans to replace coal-fired power plants, and some of the world’s largest renewable energy companies and local giants have declared they intend to seek development licences.

More than three dozen applications have been made for a so-called feasibility licence, and industry sources said only a handful of applicants would be successful.

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

The Offshore Infrastructure Registrar has said it would evaluate applications according to criteria issued to the market late last year, which included evidence of capital and previous experience. But the regulator said it could struggle if projects have similar merit criteria and are seeking the same patch of the permitted region.

Digital modelling of the proposed Star of the South offshore wind project off Gippsland.

In a sign that a decision is looming and successful bidders will be revealed, The Australian understands boundary overlaps are a key issue for officials.

Sources familiar with the decision-making process said a final decision had not yet been made, disappointing some within the industry which is growing increasingly concerned about the pace of the industry that faces widespread global competition.

There are also notable frontrunners. Star of the South – Australia’s most advanced offshore wind group backed by Cbus and CIP – is widely seen as a shoo-in to secure a licence, while Macquarie is considered a frontrunner too after securing funding from the Victorian government.

The United States, Europe and China are pushing a rapid expansion of their offshore wind industries to meet decarbonisation targets, and industry executives fear Australia could be left behind.

The Veja Mate offshore wind farm off the German coast. Picture: Copenhagen Infrastructure Partners

Sluggish development of Australia’s offshore wind industry will put at risk Victoria’s ambitious plan to place the renewable energy source at the heart of its plan to wean off its coal dependency for electricity generation in little more than a decade.

In 2022, Victoria set a target of having 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, which is five times the current renewable generation in Victoria.

Victoria is one of Australia’s most coal-dependent states. The Australian Energy Market Operator expects 60 per cent of the country’s coal-fired power stations to close in the next decade, and offshore wind is seen as the only type of generation with the scale to be able to replace the loss of the traditional source of electricity.

But Victoria is aided by some good fortune as its coastline is ideal for offshore wind-powered generators. The wind is very strong and consistent by international standards, while a large area of shallow ocean less than 50m to 60m deep is suitable for wind turbine platforms to be fixed to the seabed. This is a much more mature and lower-cost technology than floating turbines which have to be used in deeper water.

Offshore wind development in NSW would require developers to install floating wind turbines, a technology that some industry executives say is years behind fixed platforms.