There is rapidly growing interest in developing offshore wind in the National Electricity Market (NEM), including in New South Wales. This is consistent with recent international auctions where offshore wind developments are increasing in number and scale across Europe and Asia. While onshore wind remains a lower cost and faster-to-develop solution in Australia, there are advantages to offshore wind.
Offshore wind projects in Australia may:
- leverage high-capacity offshore wind resources with some time diversity from onshore wind resources
- provide economies of scale with the potential for very large project developments
- deliver consumer price benefits due to greater resource diversity
- be developed in proximity to existing electricity demand (which is typically along Australia’s east coast) and reduce the need for major transmission expansions further inland
- be developed in proximity to the NSW Government’s Hydrogen Hubs in both the Hunter and Illawarra regions
- provide an additional source of new electricity generation to support net zero emission targets and energy export opportunities
- deliver economic and employment opportunities to regional communities directly affected by the energy transition.
The Australian Government passed the Offshore Electricity Infrastructure Act 2021 in 2021, which includes a National Framework for licensing offshore generation and transmission infrastructure in Commonwealth waters. The Act empowers the Australian Minister for Climate Change and Energy to 'declare' areas off the coastline as suitable for offshore wind development. The National Framework is an important step for developing an offshore wind industry in New South Wales and Australia.
In August 2022, the Australian Minister for Climate Change and Energy announced six proposed regions for offshore renewable energy developments (such as offshore wind) around Australia. This included both the Hunter and Illawarra regions in the State. EnergyCo is working with the Australian Government and relevant NSW Government agencies to inform the next steps under the National Framework for licensing offshore generation off the coast of the Hunter and Illawarra regions.
The Australian Minister for Climate Change and Energy declared an area in the Pacific Ocean near the Hunter region as suitable for offshore renewable energy on Wednesday 12 July 2023. The declaration follows consultation on the draft area led by the Australian Department of Climate Change, Energy, the Environment and Water from February 2023 to April 2023.
The Australian Commonwealth's proposed offshore renewable energy areas were also considered in the 2022 Integrated System Plan (ISP) published by the Australian Energy Market Operator (AEMO). Candidate areas in the 2022 ISP include locations in both the Hunter and Illawarra regions, adjacent to two of NSW's declared onshore Renewable Energy Zones (REZs).
Registration of Interest (ROI) processes conducted to inform the development of NSW REZs in 2022 identified significant commercial interest in offshore wind projects, including a total of 24.5 GW in the Hunter-Central Coast region and 12.9 GW in the Illawarra region.