The $2.2 billion investment by the Commonwealth to develop an offshore system that will support Australia’s $40 billion energy security program has raised questions over whether Australia is ready for an offshore energy industry.
The government has announced the $2bn, $1.9bn and $1 billion projects, and said the money will go towards “rebalancing Australia’s energy portfolio”.
“Australia is committed to investing in renewable energy, and we believe the offshore wind resource sector will provide a key lifeline for our nation,” the prime minister said.
“We are building on our commitments to develop offshore wind energy and to support the development of the new offshore wind farm in the Pilbara region of New South Wales.”
The projects will create 4,000 jobs, and boost the gross domestic product by about $1bn, according to the Department of Energy and Climate Change.
Ahead of the announcements, the chief executive of the Institute of Chartered Accountants said the projects could be the most cost-effective way to provide a diversified and stable portfolio for the Government’s energy policy.
Chris Packer said the offshore system could provide the “most cost-efficient and reliable” way to meet the Government “economic security” goals.
“[The projects] will create jobs, they will help diversify our portfolio, they provide a credible and stable source of energy and they will provide the best way to fund the Government of Australia’s policy goals of supporting our economy in a stable way,” Mr Packer told the ABC.
Australia’s biggest offshore wind project to open in 2020Ahead the Government announced the projects, Australia’s largest offshore wind projects will be opened in 2020.
It is hoped that the offshore power generation capacity will generate enough electricity to meet Australia’s current demand and to meet its energy security requirements.
However, the Government has warned that this could change if the cost of offshore wind is significantly increased, leading to a rise in energy prices.
Australian Energy Market Operator (AEMO) chief executive Paul Stoltenberg said the first offshore wind turbines could be operational in 2020, and that the government will “be looking to build on the work that’s been done” to build offshore wind power capacity.
He said the Government is committed “to building the best offshore wind capacity possible”.
The AEMO said it had received applications from more than 200 companies to develop “the first of these large wind farms”, which will be able to generate power for up to 600 homes.
Mr Stolstenberg said a further 100 wind farms could be built, adding that the total number of turbines was likely to be “much larger than this”.
AEMA chief executive says ‘there is a long way to go’The $2billion investment is part of a $20 billion investment in renewable projects announced in May by the Abbott Government, which includes $1billion for the National Renewable Energy Agency (NREA).
The NREA is responsible for building and operating Australia’s renewable energy sector, and has also committed $10 billion towards a new offshore energy project.
According to Mr Stoltonberg, the first $3.2bn investment in offshore wind will be a key part of the NREO’s overall energy portfolio.
NREO chief executive Mike White said the government’s offshore wind plans would “help build a diversify and stable energy portfolio for Australia” and create jobs.
Earlier this year, the NREL’s president, Greg Barker, said the AEMA’s offshore projects would provide a “game changer” for the nation’s energy security and would “be a significant boost to the sector”.
However Mr White said there was “a long way” to go to meet AEMS targets.
“We’re committed to building the world’s largest renewable power system in Australia,” he said.
“This is a huge investment in our national energy portfolio, and will help build a sustainable energy system.
This is also a major step towards Australia’s commitment to a low carbon economy.”
There’s no doubt that offshore wind can deliver significant benefits for Australia, but we’re also committed to the development and maintenance of the National Electricity Market, which we will now be overseeing and which will provide Australia with an even stronger and more secure energy system.
“The AAML chief executive, Ian Stewart, told the National Press Club that the new investment in the offshore sector could be seen as a major development for the Australian energy market.
As a result, he said that the Australian market “will be significantly strengthened and the cost-effectiveness of the offshore industry will increase”.
[This investment] will allow us to have an even more robust energy system in the long term, but also create more jobs for Australians,”