From the UK and Europe, to China, Japan and the US, offshore wind is creating clean, reliable, and cheap renewable energy, catalysing employment opportunities, and seeing rapid returns on investment.
As offshore wind thrives internationally, Australia hasn’t yet ‘dipped its turbines’ into offshore wind waters – when we do, it’s a prospect that according to a report by Blue Economy Cooperative Research Centre will create up to 8000 jobs by 2030, potentially bring billions of dollars of investment for Australia, and lead to offshore wind becoming the most impactful renewable energy source in the country.
Recent policy changes by the federal government – the Offshore Electricity Infrastructure Bill, November 2021 – have paved the way for offshore wind farms to become a reality, and in a landmark announcement the Victorian Government has unveiled a series of Australian-first offshore wind targets, including at least 2GW by 2032 with generation beginning in 2028; rising to 4 GW by 2035 and 9GW by 2040. This sends a clear and strong signal to investors and those who will build and operate.
There is growing momentum and Australia is widely viewed as an exciting prospect for creating cost-effective offshore wind-energy businesses.
An imminent new regulatory framework will bring further clarity around what’s needed for investors and developers entering the market in Australia and they are now turning their attention to the emerging Australian market. The regulatory changes combined with rapid acceleration of turbine technology, falling costs across the supply chain, constraints in the existing network slowing down onshore generation, growing appetite for clean energy, and the acceleration of the energy transition, have all fuelled a groundswell of activity – with over 20 known projects in Australia (totalling more than 32GW) announced.
The ultimate prize? More renewable power generation at pace and scale to decarbonise economies and industries in Australia and beyond.
Offshore the turbines capture stronger winds, more frequently, leading to a higher capacity factor.
There is also the potential to construct larger-scale projects, with higher-output turbines that can be deployed in an optimal grid which is unconstrained by the topography of land. This enables a modular and repeatable process, which also makes construction times much faster. The construction of the wind turbines themselves is also much faster, with the ability to install a turbine onto a foundation in less than 18 hours and for it to generate into the grid the very next day.
Offshore wind energy is currently more expensive than onshore wind and other generation types, with an anticipated capex cost in Australia of approximately two times that of onshore wind energy (based on CSIRO’s GenCost 2021-22 report, with data provided by Aurecon and commissioned by the Australian Energy Market Operator). However, as with other types of renewable generation, as the industry and its supply chains develop, costs will continue to fall with the growing installation volumes, economies of scale and advancements in technology.
The competitiveness of offshore wind energy is further underpinned by the potential to deploy at larger scale, access to a prosperous wind resource at times of the day when other renewable energy sources will be unavailable or not as productive (such as onshore wind and solar), alternative grid connection opportunities located next to high demand locations and the likely reduced community concerns around noise and visual amenity.
But to realise these returns and help the sector fulfill its potential as a leading renewable energy source in Australia, how investors and developers approach new projects will be critical.
Against the backdrop of rapid pace and competition there is a temptation to dive into deep waters and risk making the same mistakes commonly seen in international offshore wind markets – which can slow projects, increase risk and lead to cost blow outs. Australia is in a perfect position to avoid, or minimise, these pitfalls and has the advantage of being able to engage with the global market for lessons learned on projects already constructed and commissioned, and ensure those lessons are carried forward into new projects in Australia.
By engaging with those that have ‘been there done that’ it allows industry in Australia to better understand common challenges, where inefficiencies were found, and where changes can be made in the design phase. This facilitates more rapid resolution of issues, keeps projects moving and leads to a more efficient, faster, smoother transition from construction through to commissioning, operations and maintenance.
While each project can differ vastly, there are many commonalities in the challenges faced across offshore wind projects – from inefficiencies in project planning and design (especially of substations) and poor risk assessment to equipment supply issues and lack of appropriately skilled workers to transition between project phases. Here are some of the top challenges, and key insights into what’s needed to overcome them for offshore wind success in Australia:
One of the most significant challenges in offshore wind projects globally is inefficient design, especially of the substation. From cable installation, to HVAC, ancillary systems, equipment selection (and location) and integration of new technologies, there are a myriad of design elements which if not considered from the start, can lead to equipment failures, reduced asset lifecycles, and huge impacts during construction.
With smarter, more practical and efficient design early in the project, it becomes possible to minimise human interaction and manipulation during construction offshore, and more seamlessly transition from construction through to commissioning and on to preparing for operations and maintenance. This drives down costs, brings better value for investment, speeds up construction and reduces risk.
Figure 1: Driving down cost and risk through innovative and efficient designs and construction sequencing.
Figure 2: Substation cable installation is one of the most significant activities early in the program. Some key considerations to minimise impacts and maximise advantage during offshore construction include: messenger line allocation, cable framework arrangement, certification of hook-on points, availability of equipment for pulling in cables, and power.
Many projects across the world are challenged to achieve completion in a set amount of time. Reasons for this vary, but always hinge on one overarching cause: poor project planning, management, and delivery – particularly a lack of flexibility in the program to accommodate failure. Some common examples include: vital equipment not being on site when it’s needed; the substation sailing too early (impacting the length of time needed to hire a jack up vessel, number of staff offshore, competence of those staff and increases to risk); out of sync delivery for building the infrastructure to support the turbines (which has a huge knock-on effect to the delivery program).
On any project there will always be unforeseen challenges and changes, and the key to minimising the impact from these is to incorporate flexibility into the program to accommodate change. Partner with experts who will plan for failure, build in time for failures to occur, open lines of communication when issues arise and adjust delivery – especially for supply chain and transmission issues. Planning for failure is a key requirement if you wish to build for success during both CAPEX and OPEX phases of an offshore wind project.
A budget for training staff is often not allocated between CAPEX and OPEX, leading to a handover from construction to operations and maintenance where staff are not adequately trained or provided with enough onsite exposure to be competent and confident using the equipment post commissioning. The most successful projects build training into the CAPEX and OPEX budgets and also ensure framework agreements are in place which enable remote support. When this occurs, people are trained and upskilled to adapt to changing conditions and can move to operations and maintenance, effectively servicing the site and taking over seamlessly from contractors.
People with a wind energy background will be key to the success of offshore wind projects, however it is common for workers with an offshore oil and gas background to be used as their skills are directly transferable across to the wind sector (and to a lesser extent from thermal power stations). However, while these backgrounds can be very valuable there are many differences between the two industries in executing the program schedule, particularly relating to the number of assets in an offshore wind farm and the area that has to be covered. Shifting mindset is fundamentally important, to ensure if a workforce is transferred, they are adequately trained and can apply offshore wind specific approaches and solutions.
Technology is advancing rapidly, often changing a generation with every new project. Keeping up with the changes, adopting the right technology and having a workforce trained to use these interconnected digital turbines and substations helps problems to be solved more rapidly and reduces the number of workers required offshore. Emerging technologies are opening new possibilities, such as the use of augmented reality headsets to connect the site team with engineers and subject matter experts who can be located anywhere in the world and provide advice through the eyes of the site technician.
Figure 3: The pace of development is rapid: 2011 turbines were commonly 3.6MW with a gearbox. In 2022 they are 15MW direct drive turbines, reducing onsite maintenance and costly major gearbox component repairs.
Understanding local conditions and thinking outside the box is essential to tackle some of the unique challenges in Australia. For example, the deep shelf off New South Wales presents an opportunity for floating rather than fixed foundations (which can be located in deeper seas, beyond 60 metres in depth). A number of the planned projects in Australia will need floating foundations, but currently a major limitation is our congested, shallow ports. To make floating wind farms viable, and be world leaders, Australia needs deep-water ports for the construction, storage and transport of floating turbines, which are more than 450 metres in component length, not including the foundations and transition pieces.
Solutions are needed to tackle that challenge, and Aurecon is already thinking about where vessels are operating, off-loading, and where will we have space for lay down areas and the latest technology and approaches that can be used. Meaningful community engagement is also critical. New environmental impact studies will be needed for marine life and habitat, and there will be new communities to work with such as those in the fishing industry and also community members and business associated with recreational water sports, although there are typically fewer concerns about the visual and noise environmental impacts.
Figure 4: Overcoming challenges to harness the benefits of floating wind farms.
Starting up an offshore wind sector in Australia brings a whole new set of complexities (when compared with onshore wind or offshore oil and gas), new supply chain requirements and a need to establish training centres to support it. Although a little later to the offshore wind ‘party’, Australia’s nascent position when compared internationally presents a unique opportunity to shape Australia’s offshore wind sector to be world leading – or as the Climate Council put it: 'a global offshore superpower'.
The role investors and developers play in this cannot be underestimated, and how we approach the design, commissioning, operation and maintenance of new projects will be a crucial factor in realising investment return and the overarching success of the broader industry as it becomes a key player in helping Australia decarbonise and enabling future green industries. New Zealand is also gearing up for a wave of positive change, as it begins work on developing legislation that will enable offshore wind farms to be built in its waters in the near future.
 Briggs, C., M. Hemer, P. Howard, R. Langdon, P. Marsh, S. Teske and D. Carrascosa (2021). Offshore Wind Energy in Australia: Blue Economy Cooperative Research Centre, Launceston, TAS. 92p.
 Offshore Electricity Infrastructure Bill 2021 Australian Government
 Offshore Wind: Policy Directions Paper 2022, Victorian State Government
 Offshore Renewable Energy in Australia 2022, Australian Government
Please change your browser to one of the options below to improve your experience.