Giant $8 billion offshore Victoria wind farm studied – The Australian Financial Review

Teesside Offshore Wind Farm, operated by EDF Energy Renewables Ltd., in Hartlepool, U.K., on Wednesday, May 3, 2017. The wind farm has a capacity of 62.1 megawatts. Photographer: Matthew Lloyd/Bloomberg

Victoria could get an $8 billion, 2000 megawatt wind farm off the coast of Gippsland - Australia's first offshore wind farm - if bold plans being hatched by two Melbourne energy executives bear fruit.

Andy Evans, who helped build the 192MW Waubra wind farm in Victoria as an executive with Spanish firm Acciona, and Terry Kallis, a former general manager with Electranet, the South Australian transmission monopoly, and former chief executive of Petratherm, a geothermal hopeful, have formed Offshore Energy to undertake an exhaustive three year feasibility study of the proposal.

Mr Kallis is also involved in the giant 600W Ceres wind farm proposal in SA.

The project could create as many as 12,000 jobs during a construction phase expected to last about a decade if the project gets the green light at the end of the three year feasibility period.

That's a potential boon in a region that faces the loss of thousands of power industry jobs as the La Trobe Valley's highly polluting brown coal power stations close down - starting with the 1600MW Hazelwood power station in March.

But Mr Evans and Mr Kallis are emphasising that their plan is at an early stage and - with the energy industry in flux - far from certain to get up. They are working withleading global engineering firm WSP/Parsons Brinckerhoff on planning and feasibility.

Offshore wind has long been touted as a more reliable source of clean power than onshore wind because it blows more constantly and at higher speeds on the high seas. But offshore wind farms also face higher capital costs, construction risk and maintenance costs because of the challenging conditions out at sea.

Still, the project illustrates the upheaval in the energy industry as nations grapple with the challenge ofaddressing climate change without disrupting economic growth orr disrupting energy stability and supply.

Australia is enjoying a wave of investment in wind farms and large scale solar farms as memories of former Prime Minister Tony Abbott's attempt to nobble the Renewable Energy Target fade and confidence returns to the sector.

Traditional coal power, by contrast, is regarded as uninvestiblebecause of the long term carbon risk and the Turnbull government has been forcedto enlargethe legislative mandate for the Clean Energy Finance Corporation in a bid to get some new investment in carbon capture technology for coal plant.

Offshore Energy's proposal is believed to be the first for a major offshore wind farm in Australia. Denmark is the global centre for offshore wind farms, taking advantage of the windswept North Sea.

Mr Evans and Mr Kallis believe Bass Strait off the Gippsland coast has similar high and constant winds to make it highly prospective for offshore wind.

MrEvans said that offshore wind's natural higher capacity factor and more constant generation would benefit electricity system capacity and security as Australia transitions to a more diverse energy mix.

"When placed in the right wind conditions like those off the coast of Gippsland, offshore wind delivers a high, consistent flow of electricity."

Mr Evans said the delivered cost of electricity from offshore wind had plummeted in recent years. "Even on current cost, offshore wind provides a new and exciting option for Australia's energy capacity and security. We expect technology and installation costs to continue to come down."

The proposed wind farm wouldinclude up to 250 turbines within a 574 square kilometre area in Commonwealth waters off the Gippsland coast,deliver about8,000GWh of electricity per year - roughly18 per centof Victoria's power usage or enough to power 1.2 million homes - and reduce carbon emissions by about 10.5 million tonnes per year.

Offshore Energy has $9 million of paid capital, according to ASIC records, a significant down payment on the expected cost of the feasibility studies.

More:

Giant $8 billion offshore Victoria wind farm studied - The Australian Financial Review