Q&A – Offshore wind – energising the industry’s development in Australia

Many other countries have been successfully producing energy from offshore wind farms for years, and it is now seen as Australia's time to catch up.

In 2022, the Federal Government announced waters off the Gippsland coast, in Victoria's south-east, would be the first offshore wind zone. Since then, public consultation has opened for several Australian projects, including most recently in June 2023, for a new offshore wind zone along the Victorian and South Australian coasts spanning 5,100 square kilometres. The zone in the Southern Ocean begins off Warrnambool in Victoria and stretches to the small town of Port MacDonnell in SA. The area could enable up to 14 gigawatts of offshore wind to be developed.

While the industry gears up, Australia is very much coming from behind in the race to green its energy supplies. However, the advantage of this is that it can learn from what those countries who were first movers, such as Denmark and the UK, have achieved and avoid any potential turbulence, according to Ramboll’s Wind Energy experts.

The Federal Government is looking for offshore wind to contribute to its emissions reduction and renewable energy targets, including its 82 percent renewable energy target by 2030, so the race is now on to 2030 when the first turbines are expected to start turning wind into electricity.

In this Q&A, Ramboll’s Global Senior Director Wind Dr. Tim Fischer, Regional Director, Offshore Wind APAC Santiago Paredes-Pinzon, and Senior Managing Consultants Belinda Sinclair and Shaun Taylor discuss the major hurdles the industry faces in Australia and how they are harnessing recent policy and investment decisions to allow Australia to sail into contention as the next frontier for wind energy.

Tim will be speaking at Australia Wind Energy 2023 in Melbourne from 25 to 26 July as part of a panel discussion on Establishing a reliable and sustainable supply chain for Australia's offshore wind sector through international cooperations.

Tim: Generally, there are no specific new challenges that Australia will face by establishing an offshore wind industry compared to any other market. The main challenges lie in connecting government goals to a roadmap that ensures available transmission capacity and connection as well as supply-chain, workforce and infrastructure when required by the projects. And this is framed in a global booming market. In terms of supply-chain and workforce, this is currently undergoing a major disruption – global targets have increased enormously over recent years, which has made it difficult for the supply-chain to follow at the same pace.

Belinda: From a planning and approvals perspective, the fact that it's such a new industry for us in Australia. These projects haven’t been done here before so the offshore wind projects that are being planned are essentially paving the way for the approvals process.

Shaun: While Australia has significant and unique marine and coastal environments, having to manage and protect these unique elements are not challenges that are unique to Australia. Successful management of sensitive coastal and marine environments has been delivered for many years in offshore wind developments throughout the world. As Belinda said, the challenge is more about developing these projects with an untested regulatory system that is still evolving. Not only is the industry evolving in Australia but the community’s knowledge and understanding of offshore wind is also evolving. There's a significant amount of development being undertaken in a short amount of time and when this happens the regulatory systems and the community’s understanding, such as here in the Hunter, plays catch up to the technology.

Shaun: I think one of the benefits of Australia developing its offshore wind industry after other countries is we can learn from international experience. Companies like Ramboll have been involved with the offshore wind industry for the past 30 years so there’s a lot of knowledge to draw on in terms of how to make this work here in Australia. The advantage is combining those 30 years of project development and engineering experience in offshore wind with local permitting and regulatory expertise. That is what is going to really get the industry going.

Tim: There are many markets to learn from, even if every country has its own specialities. From some of the European markets like the Netherlands, Australia can learn how a transparent and well-planned permit and offtake roadmap can help to de-risk projects and provide developers with certainty. Depending on the local supply-chain strategy that Australia chooses, the industry could learn from Taiwan on how to moderate investments into local suppliers, or look at Denmark and Germany, how a liberal supply-chain strategy can reduce energy prices. But there are also countries to learn from on how not to do it, such as some of the recent developments along the US East Coast, where the government tried to maximize local content and minimize cost of energy at the same time, which has led to many projects being stopped. In my opinion, the key to success is a smart market design embedded into a realistic roadmap that leads to a sustainable development of offshore wind; sustainable in terms of its impact to the environment and the society at large.

Santiago: Australia’s offshore wind journey has just started. Only recently, in early July, Australia's second official offshore wind zone was announced for the New South Wales (NSW) Hunter coast, which is expected to generate up to five gigawatts of wind energy and power more than four million homes. And the Australian Federal Government has also opened public consultation on another offshore wind zone in the Southern Ocean with the potential of 14 gigawatts capacity. So, the potential for offshore wind in Australia is huge, but 10 years is not a long time to establish a completely new industry. I hope, that in a joint effort, the local and global industry, together with the Government, will find solutions for the current challenges and we will see great development during coming years.

Belinda: Through working in onshore Renewable Energy Zones (REZs), I’ve seen a real and rapid increase from private industry investing in onshore wind projects in Australia during the past five years and the regulatory system has struggled to keep up. I think we can clearly expect the same rapid increase to happen in the offshore space and it will be interesting to see how factors such as cumulative impacts are addressed.

Shaun: When you look at the energy market with coal and gas prices fluctuating, creating increasing uncertainty of supply for industry, offshore wind is therefore becoming a more and more attractive investment in Australia. You also need to consider offshore wind in the context of the broader shift in Australia to green energy. For example, hydrogen produced using wind energy could become a key component in Australia’s zero-carbon future. As the offshore wind industry grows, the opportunities to produce and store green hydrogen will also expand and help Australia meet its net-zero targets.

Belinda: In the Environmental Impact Assessment space, there is a wealth of local knowledge with those who have worked in the offshore oil and gas space. Many of those skills are transferable, but offshore wind is a new industry for Australia so it's going to be a combination of local knowledge, upskilling local expertise, combined with international experience in offshore wind. It is key to success to also learn from the experience of operating offshore wind projects and their impact to the environment to support the necessary stakeholder processes required in Australia. Here Ramboll can build a bridge and bring lessons learnt from successfully developed projects worldwide.

Tim: Ramboll is a global company with over 600 experts working in wind energy projects all over the world. With more than 30 years of experience in the industry we clearly do have the technical expertise, but we need the local insight to implement successful projects. To establish the industry long-term it is crucial to share our knowledge and build up local knowhow. As Belinda mentioned, there is a lot of talent available from the oil and gas industry and other adjacent industries. We as a company are committed to growing a local expert community and transferring knowledge from our global wind hubs to Australia.

Tim: The global offshore wind industry is currently undergoing a massive supply-chain challenge. Political targets have been increased too fast for the industry to follow, and geopolitical influences have led to significantly increased raw material prices. To reach the global offshore wind targets defined until 2030, the supply-chain would need to increase by a factor two to three. And pricing mechanisms in projects need to be re-thought allowing indexed pricing that provides more flexibility. It is unavoidable that both trends will also impact Australia’s offshore wind goals and it will therefore be crucial to develop a smart supply chain strategy and market design. And the answer will not be to target a 100% local supply chain. Such a strategy will be unrealistic and economically not feasible. But certain key components should be produced in Australia that fit well to the local workforce and adjacent industry experiences, or because of their size and therefore logistical challenges. At the same time there will be a need for smart hybrid solutions that for example rely on pre-fabrication of sub-components in Asia and then only target final assembly in Australia.

Santiago: As Tim mentioned it is crucial for Australia to establish its own supply-chain. With a well-established steel and cement industry the foundation to produce offshore wind components is already given. But of course, specialised production facilities need to be installed and a skilled workforce is needed to set up a reliable local supply chain. Therefore, as said before, we need to transfer existing knowledge from other industries supported by global offshore wind expertise.

Shaun: We’ve been talking to several ports around Australia about how they are preparing for the offshore wind industry, both in terms of supporting its development and operations and benefitting from it. Most ports are seeing this as an opportunity for them to diversify their operations and their energy supply. Their land can physically support fabrication and construction during the development of the wind towers, and ports will provide the facilities and infrastructure for maintenance of the turbines. Some ports, such as the Port of Newcastle, will be able to use the physical location of the infrastructure to support their own green energy ambitions with the Port of Newcastle looking at further developing its Clean Energy Precinct.

Belinda: For the ports as well as for the project developers themselves, connecting with other ports around the world and having support is important. From our discussions with the ports, they are in a phase of preparing for the transition and very much trying to get on the front foot.

Shaun: If we take NSW as an example, there are several factors that come into play in the Hunter and Illawarra zones. Here, we are looking at floating wind given the depth of water where the turbines would be installed. There are also complex environmental considerations of various factors offshore and onshore that need to be considered. Obviously, there are the factors out in the ocean relating to the habitat such as what areas are used for shipping, what areas are typically used for fishing and what are the migratory pathways for marine mammals? But then we also must think about the cables that bring the power back onshore – what are the environmental constraints along the shoreline that you’ll be encountering? What are the environmental factors from there to the existing transmission lines, including land use and local communities that these run through? So, there's several elements that come together to help with that site selection and these are not considered in isolation. It's a combination of environmental, social and engineering factors that need to fit together.

Belinda: The current grid will need to be upgraded to accommodate offshore wind projects. However, in terms of the power going into the existing grid, keep in mind that as coal fired power stations are decommissioned and reduced, then it's expected that this new power will accommodate that capacity difference. Nevertheless, there’s a big body of work just to make sure that the transmission network is ready to take the significant increase in power passing through it from a different location. This is where the various levels of government, from Federal to State and also local, as well as the various agencies within them, need to work together to support the transition.

Belinda: I think before we even start to look overseas, we must also take lessons from what we have been doing in Australia with our onshore REZs. We’ve now had a few onshore REZs rolled out but the community consultation around those has been disjointed between regulators and proponents as a result of the planning process consultation requirements and has left the community confused between projects and suffering fatigue from consultation with governments and individual proponents. These are very complex projects with many different stakeholders and there's a significant opportunity for local learnings in that regard as well. Bringing the community along on the industry’s journey and keeping the community informed and educated on what are the real rather than perceived impacts is incredibly important.

Shaun: In my space, which is the early stage of project development, I’d really like to see digital tools used more effectively in the impact assessment for these projects. We're already doing this with some of our partners on the onshore renewables work. Moving to a digital Environmental Impact Statement, for example, can enhance the community’s understanding of the projects through improved imagery and greater interactivity. The use of digital imagery can provide greater detail on potential impacts on the visual environment, natural environment and recreational environment. Communities want to have an understanding of what a project is actually going to look like and this is where digital tools can really help in that initial planning stage. Some of our technical partners are also using digital technology in surveys for migratory birds and marine mammals, providing us with an even greater understanding of the existing environment and how to manage the potential impacts.

Shaun: Australia has a significant opportunity with offshore wind. We are one of the country's that is best placed geographically and in terms of our natural environment for green energy production. The challenge, but also the opportunity, for Australia is how we can commercialise the export of this energy. If you look at my hometown of Newcastle, there is the opportunity for us to make the same shift that we did in 1999 when the steelworks ceased operation and we transitioned the local economy and our skills base to a greater focus on the coal sector, as well as the start of our greater focus on the education, health and services industries. As Australia moves away from exporting coal, there is another opportunity for regions like Newcastle and the Illawarra in NSW, and the Gippsland region of Victoria to be part of shaping new green industries and exports, both directly and indirectly supported by offshore wind and other renewable energy.

Tim heads Ramboll’s global wind business with over 600 staff working across many different sectors in over 20 dedicated offices related to wind energy services. Coming from a university background in wind energy and aerospace and aircraft design, he has 20 years of experience in the wind business, most of this time within offshore wind. Besides his management role at Ramboll, Tim is also active in several board and supervisory roles, such as for Germany’s largest offshore wind university and R&D network FORWIND as well as in his role on the Board of Directors of the US Business Network for Offshore Wind.

Santiago is a highly skilled Director with significant experience in offshore wind. Since 2005, Santiago has utilised his cross-cultural background and interpersonal skills to lead teams, advise clients, and deliver projects that range from feasibility studies to highly complex detailed designs of foundation structures for offshore wind turbines. Santiago has worked on projects in Australia, Japan, Taiwan, South Korea, the UK, China, Denmark, Germany, the Netherlands, Belgium, Spain, France, and the US. He is currently responsible for Ramboll's activities within offshore wind across the Asia Pacific.

Based in Newcastle, Australia, Belinda is a senior environmental scientist with more than 15 years of experience consulting in impact assessment and planning. Belinda’s primary experience is in the development of multidisciplinary environmental assessment documentation for greenfield State Significant Developments and Review of Environmental Factors across NSW. Belinda has undertaken environmental and planning assessments for various market sectors, including renewable energy, resources, infrastructure (rail, road, water and wastewater), agriculture and manufacturing.

Based in Newcastle, Australia, Shaun has more than 25 years of environmental consulting experience in Australia and the Middle East, primarily in the field of environmental impact assessments, management and approvals. Shaun has extensive experience in the management of multi-disciplinary teams, having managed various environmental assessment and management projects throughout the Hunter Region, regional NSW, Victoria and Queensland. This has included a wide range of infrastructure developments, including renewable energy projects, electricity transmission infrastructure and port development. He has often worked on these projects from options evaluation, site selection and constraints analysis, through to environmental impact assessment and providing environmental management and ongoing approvals support during construction and into operation.