17/09/2021 - 14:00

Thar she blows

17/09/2021 - 14:00

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WA is ideally placed to secure reliable renewable energy from offshore wind farms.

Offshore wind is a key renewable energy source in Europe. Photo: Pete Godfrey on Unsplash

It’s a familiar daily rhythm: late afternoon, the sun starts to set beyond the horizon, the wind starts to fade, and people arrive home from work.

Around this time, energy demand starts to ramp up as onshore wind and solar generation slows down.

This is known as the duck curve.

It causes big problems globally for the energy system as more renewables enter the system; and the duck is fattening.

As Western Australia brings on additional renewables capability, this shortfall will cause more problems for the energy system unless we start to diversify our generation.

Offshore wind is one option.

However, many in Australia wonder why, given the vast tracts of land available for wind farms, we would choose the greater costs associated with building offshore.

Several factors suggest the offshore wind should be an active consideration.

Crucially, offshore wind peaks at this time of critical demand, which makes it a useful resource to add to the energy mix.

As solar and onshore wind declines in the late afternoon, offshore wind will typically be generating.

The wind is stronger out at sea, making generation more reliable and eliciting greater capacity factors of about 50 per cent, far exceeding onshore wind.

Logistically, the ability of offshore wind farms to strategically tap into existing onshore grid connections in the South West Interconnected System is another win.

It means renewable energy can reach the bulk of WA’s energy customers without taking up huge swaths of precious land or registering heated complaints from affected communities.

One of the commonly cited barriers to bringing offshore wind to Australia is the cost.

In Europe, where offshore wind is a key renewable energy source, a range of subsidies have driven down the cost of offshore wind.

In the UK, fierce competition between generators to compete for the Contract for Difference subsidy led to a drop in the strike price paid for electricity generated from offshore wind from £114-£120 per megawatt hour in 2012 to £39/MWh in 2019.

As more offshore wind is deployed, the cost of capital for these projects has fallen.

More than 10 gigawatts have been installed to date, with a further 19GW of offshore wind projects in the pipeline.

In the Netherlands, Vattenfall is building the first subsidy free offshore wind farm (although the grid connection is provided by the government, significantly lowering costs).

As the technology has matured and costs have dropped, Europe is seeking to connect offshore wind farms to other countries via interconnectors and hubs.

The focus is on better coordination of where offshore wind farms are located, such as multiple projects connecting to a single onshore landing point.

Recent analysis from the Australian Energy Market Operator in the 2021 Inputs Assumptions and Scenario Report points to equipment costs being lower for offshore wind than batteries, and comparable equipment and installation costs to onshore wind.

Experienced players such as Copenhagen Infrastructure Partners are keen.

Its 200MW project Star of the South is Australia’s first proposed offshore wind farm.

Located in Commonwealth waters off Victoria, the project was subject to bespoke approvals as there is not existing regulation to facilitate offshore wind developments.

There are currently three proposed offshore wind farms in WA, one located in state waters.

Australis Energy’s 300MW farm has a proposed location in the South West and plans to plug into the Kemerton substation, ideally located to provide renewable generation to SWIS customers.

This would provide crucial added generation where Western Australians need it most.

This need has been identified in the government’s Whole of System Plan, which recognises that wind generation in the South West matches existing transmission capacity, is a lower cost solution, and would diversify the timing of wind generation in the SWIS.

Additional government consideration of a systematic regulatory regime and targeted industry support would help bridge the gap between an offshore wind solution to an identified market need.

WA is perfectly placed to utilise its vast experience from operating offshore oil and gas platforms and pivot towards offshore wind.

Advantages can also be taken from Australia being a late adopter, benefiting from advancements in turbine technology and lessons from Europe to keep costs down.

We can focus on making WA the most attractive state in Australia for new offshore wind investment by establishing a clear regulatory regime and being proactive with project proponents.

By strategically targeting the location of these offshore wind projects to connect to existing grid connections in the SWIS, WA consumers will benefit from lower cost access to renewable generation.

  • Joe Doleschal-Ridnell is director at JDR Advisers, where he works with clients in mining, energy and industry

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