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BlueFloat Energy eyes 1 GW+ Australian floating offshore wind projects

23 December 2021 Keiron Greenhalgh

Floating offshore wind specialist BlueFloat Energy laid out ambitious plans for multiple projects in waters off the southern and eastern coasts of Australia 22 December, although the company admits there's a long way to go before the first turbines are spinning as the country takes its first voyages into the sector.

The private equity-backed developer is teaming up with Australian advisory firm Energy Estate to develop three offshore wind projects, two of which are set to be floating facilities, while the third will be a bottom-fixed development.

The 1.4-GW Hunter Coast Offshore Wind Project will be located in waters off the coast of New South Wales while the 1.6-GW Wollongong Offshore Wind Project will be located across two sites in waters further south along the state's coast. The 1.3-GW Greater Gippsland Offshore Wind Project is a bottom-fixed facility in state of Victoria waters planned by the joint venture (JV).

However, the partnership is also assessing a number of additional sites off the coasts of Victoria, South Australia, and Tasmania and plans to announce further projects in early 2022, the companies said. In addition, the JV hopes to share transmission infrastructure with other offshore wind developers, tap into developers' growing enthusiasm in Oceania for green hydrogen and energy storage via partnerships, and attract manufacturers in the sector to Australia, they said.

"Offshore wind energy is booming globally and now it is Australia's time. We are excited by the prospect of introducing the two types of offshore wind technology (floating and fixed) into Australia, as this will enable us to harness some of the best offshore wind resources globally," Carlos Martin, BlueFloat CEO, said in a statement announcing the plans.

Martin's enthusiasm for Australia's wind resources isn't just bombast from a project developer. Government agency Geoscience Australia has come to the same conclusion. It said the top-ranked potential is in the Bass Strait between the states of Victoria and Tasmania—the location of BlueFloat's Greater Gippsland project and Star of the South, which is expected to be the country's first offshore wind farm.

The Bass Strait is also the target for Nexsphere, formerly known as Brookvale Energy, which has the support of the government of Tasmania, for a 500-MW to 1-GW wind farm.

Gippsland projects' prospects are brighter than most, IHS Markit Research and Analysis Associate Director Logan Reese told Net-Zero Business Daily, because of the proximity to existing infrastructure.

Geoscience Australia says meso-scale maps show Australia's "greatest wind potential lies in the coastal regions of western, southwestern, southern and southeastern Australia." Coastal regions with high wind resources, or wind speeds above 7.5 meters/second, include stretches along the Great Australian Bight and the Eyre Peninsula in South Australia, to western Victoria, and the west coast of Tasmania, it said. Wind speeds of 7 meters/second are typically considered commercially viable, according to a World Bank unit.

When the BlueFloat JV will be able to take advantage of those wind speeds is as yet unclear, with timelines a work in progress in the nascent sector. Nick Sankey, BlueFloat's country manager in Australia, told Net-Zero Business Daily this is the first of four to eight possible years of development, although he hopes the shorter end of the range will be possible, followed by two or three years of construction and commissioning.

Regulatory landscape takes shape

But at least the regulatory landscape in Australia for offshore wind is taking shape after a slow start—current global offshore wind leader the UK has more the 10 GW of capacity already up and running and is aiming for 40 GW by 2030.

Australia's Parliament on 25 November backed a government package of three laws establishing a regulatory framework for construction of offshore wind farms and the related transmission infrastructure. The package allows the government to create offshore wind development zones, grant licenses, and names a regulator for the sector.

"This legislation will accelerate a number of key projects already under development—projects that include the Star of the South, Sun Cable, and the Marinus Link transmission line, which will connect the mainland to Tasmania's Battery of the Nation [pumped storage] project, strengthening reliability and helping to keep the lights on and energy prices low," Minister for Industry, Energy and Emissions Reduction Angus Taylor said 25 November after the bill passed.

BlueFloat praised the regulatory progress. "The timing of our announcement comes hot on the heels of [the] legislation that provides a framework for developing offshore wind projects here," Sankey said in the statement unveiling the projects. "This is a pivotal step as the [bill] establishes a regulatory scaffold to enable the construction, installation, commissioning, operation, maintenance, and decommissioning of offshore electricity infrastructure," he added.

The development team behind Star of the South was just as pleased. "This bill is a major milestone in kick-starting a new industry, realizing Australia's offshore wind potential, and unlocking jobs and economic benefits for regional Australia," Star of the South CEO Casper Frost Thorhauge said in a statement.

Transmission connections

Further support for the growth of the Australian offshore wind sector came as the second half of December got underway. On December 16, the manager of much of the country's electricity system, the Australian Energy Market Operator (AEMO) laid out a path for connecting additional renewable energy, power storage, and hybrid projects such as BlueFloat's planned facilities to the grid.

In partnership with industry groups led by the Clean Energy Council, the AEMO published the Connections Reform Roadmap, which sets out 11 reforms and implementation plans. AEMO CEO Daniel Westerman said when the roadmap was announced that Australia's energy industry is undergoing its most extensive transformation in a century, driven by record investment in wind and solar generation.

The Australian government plans to add 33,000 GWh of extra renewable electricity generation a year through 2030, in what is known as the Renewable Energy Target initiative, which seeks to reduce the power sector's GHG emissions.

Emissions from electricity generation fell 4.5% or 7.7 million mt year on year to 163.9 million mt in the 12 months through 30 June, the government said 30 November. Overall, Australian emissions fell 2.1% or 10.8 million mt year on year to 498.9 million mt. The government said the country's GHG emissions were 20.4% below its 2005 levels, the baseline for the country's Paris Agreement goals.

Clean Energy Council analysis of Australia's large-scale renewable energy development pipeline shows the private sector is ready to deploy $51.5 billion of investment through financially committed and under construction projects, the AEMO said. Much of the large-scale wind and solar capacity is expected to power the multitude of mega-scale green hydrogen projects on the drawing board.

Clean Energy Council Chief Executive Kane Thornton said that grid connection and network access were a top concern of clean energy investors.

AEMO's Draft 2022 Integrated System Plan, published 12 December, forecasts construction of nine times the National Energy Market's current utility-scale wind and solar generation capacity, a jump from 15 GW to 140 GW by 2050, it added. Reese said Australia has waters suitable for both floating and bottom-fixed offshore wind projects.

BlueFloat said the Hunter Coast Offshore Wind Project will be located in an offshore wind renewable energy zone identified by AEMO in the 2022 Integrated System Plan. The developer said the project will support the revitalization of the Hunter region as it transitions from coal-fired power. Among the potential customers, BlueFloat said, are the Tomago aluminum smelter as well as green hydrogen electrolyzers that would be part of the Hunter Hydrogen Hub.

The hub is part of the "hydrogen valleys" initiative that Prime Minister Scott Morrison told US President Joe Biden in April would rival the impact of California's famed Silicon Valley information technology hub in years to come. The valleys, Morrison said, would produce "the cheapest clean hydrogen in the world." BlueFloat said the Wollongong Offshore Wind Project would also support a hydrogen hub and exports.

However, much remains to be done at this early stage in the Australian offshore wind market's development. Among the next steps required are designation of the sector's development zones by the government and formulation of an environmental impact statement process, IHS Markit's Reese said.

BlueFloat global targets

While the offshore wind sector is getting underway in Australia, BlueFloat is also eyeing more developed offshore wind markets and others where it is seeking first-mover advantage. It is bidding into auctions in two of the nations leading the floating wind charge—the UK and France—as well in others finding their feet such as Spain, Italy, and New Zealand.

In France, the company is part of a consortium with wpd and Vattenfall that pre-qualified for the country's fifth offshore wind tender off the coast of southern Brittany in 2022, which would be the largest auction held solely for floating offshore wind projects so far.

BlueFloat is eyeing opportunities on two fronts in the UK—the ScotWind leases and the Celtic Sea, where the UK Crown Estate advanced ambitions for western English and Welsh waters on 11 November by unveiling a leasing process that could see as much as 4 GW of floating wind capacity built.

The company's partner in the Celtic Sea is Falck Renewables, which it has also paired up with for projects in Scotland and Italy. The Scottish ambitions have added heft as the two companies teamed up with Danish renewables giant Ørsted as they seek a share of the 10-GW ScotWind prize.

BlueFloat is working with a familiar face across the Tasman Sea from Australia in New Zealand too. One of the company's partners there is Energy Estate. It is also working with local consultancy Elemental Group.

Posted 23 December 2021 by Keiron Greenhalgh, Senior Editor

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