Turning ocean winds into electricity is getting harder
The Albanese government last year awarded permits for a dozen companies to begin investigating the feasibility of building giant turbines off Victoria's coastline that could turn ocean winds into electricity for homes and businesses and help compensate for the impending closures of ageing coal-fired power plants.
However, as the global offshore wind sector reels from rising interest rates, soaring equipment and construction costs and supply chain disruptions, investors are privately warning they now need concrete government commitments to demonstrate the certainty over electricity prices and revenue to their lenders.
Some of the prospective developers of the first Australian offshore wind projects have withdrawn from their early feasibility studies already, including one in the Gippsland zone: BlueFloat Energy's Gippsland Dawn project proposed between Paradise Beach and Ocean Grange.
While the Victorian government has previously said it would hold the first auction in September to award 'contracts for difference', including a cap and floor price to help mitigate revenue risk, industry sources this week said it remained unclear when that would go ahead.
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A dispute between Victoria and the Commonwealth about how much federal funding should be committed to Gippsland offshore wind projects had not been resolved, they said.
'We are seeing continued interest, but increased discussion between state and federal governments about what that support looks like,' said a source, who requested anonymity to discuss the private talks.
Southerly Ten, the developer of the 2.2-gigawatt Star of the South project in Gippsland, regarded as the nation's most advanced offshore wind proposal, said the auction would be a 'crucial next step to keep progress on track for the whole industry'.
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