Winding up floating offshore wind projects
The way we harness energy has changed remarkably. Once heavily dependent upon fossil fuels, the world has revolutionised the way it generates energy in response to rising global greenhouse emissions and the devastating impacts of climate change.
In 2021, DLA Piper was appointed as the legal services provider for the United Nations Climate Change Conference (more popularly known as ‘COP26’), at which Australia pledged to achieve net-zero emissions by 2050 and take steps to transition to a net zero energy system over the coming decades. As traditional power stations start to retire as part of the global response to act, floating offshore wind farms have become an emerging green technology and a key pillar—alongside onshore wind and solar photovoltaic—of each country’s plan to meet its decarbonisation targets in the coming decades. Australia’s shift in policy towards net-zero emissions and its natural geography support the success of new green technology projects inviting increased interest from investors.
Following COP26, the Australian Government subsequently legislated these targets by introducing the Climate Change Act 2022 (Cth), reaffirming Australia’s commitment to reduce its carbon emissions reduction target by 43% and achieve net zero emissions by 2050. With other countries indicating similar desires to reduce their greenhouse emissions, Australia has been bolstering global their partnerships by signing cooperation and trade agreements with the aim to help strengthen the supply chains required for the development of green technology in the future and boosting investors’ access to hydrogen, liquefied natural gas and minerals from Australia.
Floating offshore wind turbines, unlike traditional turbines which are typically fixed to the seabed, are raised upon buoyant structures which are attached to the seabed with multiple mooring lines and anchors, allowing the wind turbines to be deployed in larger, deeper offshore areas with higher wind potential. The wind turbines capture the energy taken from the force of the winds out at sea, which spin a generator and create electricity, and then supply into the grid to power households and businesses. The abundance of deep water off Australian’s enormous coastline combined with grid access and advancements in “floating foundation” technology has primed Australia to become a global offshore wind superpower and frontrunning investment partner in energy and renewables.
To realise the economic and investment potential associated with offshore wind projects, the Australian Government introduced the Offshore Electricity Infrastructure Act 2021(Cth) (OEI Act), a dedicated regulatory regime, that DLA Piper has commented on last year, which provides a clear legislative framework for the licensing, development and construction of offshore wind projects in Australia. Since the OEI Act came into effect on 2 June 2022, the Australian Government has seen a considerable uptick in the public announcements of offshore wind proposals. The most advanced project is the Star of the South, Australia’s first offshore wind project located off the south coast of Gippsland in Victoria with an estimated cost of AUD 8 billion and generational capacity of up to 2.2 GW. Other proposals include Equinor and Ocean Energy’s four proposed offshore wind projects off the coast of New South Wales and another in the Southwest of Western Australia (each with a generation capacity of 2 GW), and Alina Energy’s proposed development of a 1 GW offshore windfarm near Portland in Victoria.
The outlook of Australia’s offshore wind industry is overwhelmingly favourable. As the global boom in offshore wind and accelerated development in floating turbine technology has lowered the costs of turbines, a sea of opportunity has opened up for offshore wind projects, making Australia an attractive destination for investment.
