The backers of an audacious plan to build an $8 billion, 2000 megawatt wind farm off the coast of Gippsland – Australia’s first offshore wind farm – have waited for years for prices for the technology to come down to viable levels.
“We have been sitting very quietly on this for a number of years waiting for policy certainty and for pricing to come down, and it has and we think it will continue to do so,” said Andy Evans, the chief executive of Offshore Energy.
Mr Evans, who helped build the 192MW Waubra wind farm in Victoria as an executive with Spanish firm Acciona and previously worked for BHP Billiton, has joined Terry Kallis, a former general manager with Electranet, the South Australian transmission monopoly, and former chief executive of Petratherm, a geothermal hopeful, to form Offshore Energy to undertake an exhaustive three-year feasibility study of the wnd farm proposal.
Mr Kallis is also involved in the giant 600W Ceres wind farm proposal in SA. The project could create as many as 12,000 jobs during a construction phase expected to last about a decade if the project gets the green light at the end of the three-year feasibility period.
That’s a potential boon in a region that faces the loss of thousands of power industry jobs as the La Trobe Valley’s highly polluting brown coal power stations close down – starting with the 1600MW Hazelwood power station in March.
Far from certain
But Mr Evans and Mr Kallis are emphasising that their plan is at an early stage and – with the energy industry in flux – far from certain to get up. They are working with leading global engineering firm WSP/Parsons Brinckerhoff on planning and feasibility.
Offshore wind has long been touted as a more reliable source of clean power than onshore wind because it blows more constantly and at higher speeds on the high seas. But offshore wind farms also face higher capital costs, construction risk and maintenance costs because of the challenging conditions out at sea.
Still, the project illustrates the upheaval in the energy industry as nations grapple with the challenge of addressing climate change without disrupting economic growth orr disrupting energy stability and supply.
Australia is enjoying a wave of investment in wind farms and large scale solar farms as memories of former Prime Minister Tony Abbott’s attempt to nobble the Renewable Energy Target fade and confidence returns to the sector.
Traditional coal power, by contrast, is regarded as uninvestible because of the long term carbon risk and the Turnbull government has been forced to enlarge the legislative mandate for the Clean Energy Finance Corporation in a bid to get some new investment in carbon capture technology for coal plant.
Offshore Energy’s proposal is believed to be the first for a major offshore wind farm in Australia. Denmark is the global centre for offshore wind farms, taking advantage of the windswept North Sea.
Mr Evans and Mr Kallis believe Bass Strait off the Gippsland coast has similar high and constant winds to make it highly prospective for offshore wind.
Mr Evans said that offshore wind’s natural higher capacity factor and more constant generation would benefit electricity system capacity and security as Australia transitions to a more diverse energy mix.
“When placed in the right wind conditions like those off the coast of Gippsland, offshore wind delivers a high, consistent flow of electricity.”
Mr Evans said the delivered cost of electricity from offshore wind had plummeted in recent years. “Even on current cost, offshore wind provides a new and exciting option for Australia’s energy capacity and security. We expect technology and installation costs to continue to come down.”
The proposed wind farm would include up to 250 turbines within a 574 square kilometre area in Commonwealth waters off the Gippsland coast, deliver about 8,000GWh of electricity per year – roughly 18 per cent of Victoria’s power usage or enough to power 1.2 million homes – and reduce carbon emissions by about 10.5 million tonnes per year.
Offshore Energy has $9 million of paid capital, according to ASIC records, a significant down payment on the expected cost of the feasibility studies.
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