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Energy & Utilities

What can Australia learn from the UK’s offshore wind sector?

9 Feb 2022, by Amy Sarcevic

Australia’s offshore wind sector is set for exponential growth this year, with legislation now permitting the development of turbine infrastructure on the domestic seabed.

This legal groundwork, combined with the nation’s geographical advantages, give increasing hope that offshore wind will become a viable alternative as we transition away from our ageing coal fleet and power the next stage of growth in clean energy. In fact, 14 domestic offshore wind projects, worth a combined 25GW (25,000MW), have already been announced, with many more anticipated in the years ahead.

However, unlike global peers that have been developing offshore wind farms for decades, more work needs to be done to fine-tune national policy and scale up the industry. Production costs for offshore wind assets remain unattractive to some developers and investors, and there are concerns that existing methods for producing the technology could do more harm than good to the environment.

Best practice

As Australia makes headway in addressing these challenges, eyes are turning towards the United Kingdom – one of the world’s most seasoned users of offshore wind. With its first offshore wind farm becoming operational nearly two decades ago, more than 13 percent of the nation’s overall energy output is now derived from offshore turbines.

Linda Miles, Senior Trade Specialist, Energy and Low Carbon Transition – Australia at Scottish Development International says, given the environmental similarities, Australia could learn from the UK’s approach to scaling the sector.

“The UK – particularly Scotland – is similar to Australia in terms of both its strengths and challenges,” Ms. Miles said. “Like parts of Australia, Scotland has a fantastic wind resource; and the seabed depth is favourable with long stretches of shallow water. The geology of the seabed and experience from the oil and gas sector also lend themselves well to drilling and turbine construction.

“Constraint wise, ports in Scotland, like Victoria, are already used extensively for commercial shipping; and great care needs to be taken with spatial planning to ensure fishing, ocean freight and wildlife can co-exist with offshore construction. There are also large numbers of people required, especially during construction. Oil and gas personnel can be redeployed but will need to be upskilled.

“Given these similarities, there are areas where Australia could model Scotland’s approach.”

So, what can we learn from Scotland?

Initiatives to attract developers and investors – 

Over the years, the UK has churned out a number of initiatives to attract offshore investment and usage. Under the ‘Contracts for Difference’ (CfD) scheme, developers receive a fixed rate for low carbon electricity generated over fifteen years; and are paid the difference when the ‘strike price’ exceeds a ‘wholesale market reference price’. When the reverse happens, the generator makes up the difference.

“This approach acts as a hedge for the customer and gives price stability to financiers. It has worked really well to encourage investment in the UK and scale up the North Sea, helping pilot projects progress to commercial projects rapidly,” Ms. Miles said.

Recently, the outcome of ScotWind Round 1 was also announced – a scheme in which areas of the seabed around Scotland are leased to wind farm developers. “Option agreements (lease offers) have been offered to seventeen projects with a combined capacity of nearly 25GW of new generating capability over the next decade,” Miles added.

The developers of these seventeen projects are headquartered in the UK, Spain, Sweden, Germany, Belgium, Norway and Canada. “It has whetted appetite for investment globally and built up the industry’s export potential.”

Supply chain development and skills training –

Additionally, Scotland has developed three offshore wind ‘clusters’, in which academia, industry and the private sector work together to map and grow the supply chain. “Clusters, much like those established in Australia in the hydrogen sector, get everyone on the same page, linking up ideas, intelligence and encouraging collaboration,” said Ms. Miles.

Scotland’s work on skills development has also bolstered its domestic supply chain. “It has worked extensively with local universities and colleges to ensure subsequent generations can meet talent demand for the sector,” Ms. Miles said.

Creating a sustainable value chain- 

When turbines come to the end of their life, they often end up in landfill, prompting widespread criticism from the community. Scotland is taking significant measures to combat this by developing turbines with sustainable composites, and exploring ways to recycle or repurpose their components. The towers and blades of former turbines at the Windy Standard farm in Scotland, for example, could be turned into playgrounds, climbing walls, skate parks and pedestrian bridges.

“The environmental impact of expired wind farm assets has received a lot of attention and criticism over the years. Scotland has been quick to respond and come up with creative ways to redeploy the assets – something for Australia to consider as it scales up the industry,” Ms. Miles said.

Linda Miles is due to present at the Australian Offshore Wind Conference, hosted by Informa Connect, on 5 April where she will talk more about lessons learned from overseas.

This year’s event will be held virtually and in-person at the Rendezvous Hotel Melbourne.

Learn more and register.

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