Origin Energy moves to secure NSW offshore wind licence as it shores up renewable pipeline

Australia’s largest energy retailer has partnered with Spanish company BlueFloat to develop an offshore wind project in NSW, as it moves to accelerate its renewable pipeline.

Origin Energy has moved to secure a licence to develop an offshore wind project in NSW, as Australia’s largest electricity and gas retailer moves to accelerate its renewable energy pipeline.

Origin has partnered with Spanish zero emission developer BlueFloat Energy to apply for a feasibility licence to develop in the Hunter region – the second such permit that the Australian company has sought. Origin earlier this year partnered with renewable energy RES to develop an offshore wind project in Gippsland.

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

The move by Origin is a boost to the prospect of NSW’s energy transition. Origin – which is the subject of a new $20bn takeover bid from Brookfield and EIG Partners – has significant capital and local experience to aid the development of the project. Brookfield has promised to spend between $20bn-$30bn on new renewable energy projects.

A spokeswoman for Origin confirmed the partnership with BlueFloat, which she said has significant expertise in the technology needed for the Hunter.

“Origin undertakes a careful assessment of any potential partners for our business, including their commercial, technical and resource capabilities, and ensuring a high-level alignment of purpose and values,” she said.

“BlueFloat has standout development and technical capabilities in the emerging floating wind market, which we believe complements Origin’s scale, expertise in the Australian energy market and deep experience in stakeholder engagement across the delivery of large, complex energy infrastructure projects.”

The Hunter region for offshore wind shapes as technically challenging. Unlike in Gippsland, the seabed in the NSW region falls away sharply – meaning would-be developers will have to use so-called floating wind turbines.

A floating offshore wind platform is the concrete, steel or hybrid substructure on which the wind turbine is installed, providing it with buoyancy and stability. The technology is in its infancy and is significantly more expensive than the fixed turbine equivalents.

Although the Hunter has technological difficulties, the region has notable upside. It is close to significant load centres and the recent retirement of AGL Energy’s Liddell coal power station means there are existing transmission lines that could be used to transport the clean energy produced.

The opportunity has already lured Norwegian giant Equinor – which has partnered with local company OceanEx – created by the founders of Australia’s most developed offshore wind project, Star of the South in Victoria.

Interest in offshore wind is growing rapidly with developers jockeying for position as states and territories earmark the generation source as central to plans to wean off fossil fuels.

Offshore wind projects are significant in scale, likely desired by Brookfield and EIG, which have promised to develop some 14GW of zero-emission capacity if they are successful in their bid for Origin.

Should Origin secure the two licences, the two offshore wind projects in Victoria and NSW would contribute a sizeable chunk of that pledge.

States, most notably Victoria, have thrown their support behind offshore wind.

The Victoria state government last year set a target of generating the equivalent of about 20 per cent of its energy needs from offshore wind within a decade.

The target climbs to 4GW by 2035 and 9GW by 2040 – well in excess of Victoria’s own energy needs. Excess electricity generated could be stored or sent across the wider National Electricity Market, positioning Victoria as a major renewable energy powerhouse.

Victoria is one of Australia’s most coal dependent states. The Australian Energy Market Operator expects 60 per cent of the country’s coal 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.