There were more than half a dozen other significant factors that caused a great Australian renewable energy crash. Australian developer of the Gippsland Dawn offshore wind farm has formally walked away from the project. This decision, announced by Michael Wright, highlights the growing concerns regarding the lengthy approval processes for renewable energy projects in Victoria and across the nation. The Gippsland Dawn wind farm alone will provide electricity for more than one million households. It will further allow Australia to achieve its world-leading target of 82 percent renewable energy by 2030.
Wright underscored how today’s slow approval rate is stifling the build-out of crucial renewable energy infrastructure. He expressed his frustration, stating, “It’s taking way too long to get to a yes or to a no on whether or not a project goes ahead, and that’s a material concern for the country because it’s how we’re going to keep the lights on.”
As a vote of confidence, the federal government in November awarded major project status to the Gippsland Dawn project. This program hopes to reach a capacity of 2 gigawatts. The cancellation has left many speculating about the fate of other planned renewable energy projects in the region. Such potential is especially the case for the Illawarra region’s proposed offshore wind farm.
Delays and Economic Viability
Bruce Mountain, director of Victoria University’s Victoria Energy Policy Centre, pointed to a more immediate danger. He addressed how long delays between policy announcements and groundbreaking have soured the market to interested investors. He remarked, “There has been a surge in offshore wind development costs globally and those costs have not yet come down.”
Additionally, Mountain pointed out that the economics of offshore wind projects are much worse than they had expected. He pointed out, “The economics of offshore wind now is much weaker than was thought to be, say three to four years ago.” This change in financial viability is making an already extremely competitive and complicated environment for renewable energy developers to navigate.
Wright too, questioned the possible damaging effects on industry workforce training and readiness. He doubted that there would be sufficient backing. The truth is that tens of thousands of electrical workers are needed to build out our renewable energy infrastructure. “What I have a concern about is, are we going to have an industry that can support training up the thousands or tens of thousands of electrical workers that we need to build this out?” he asked.
Future Targets and Challenges
The state government of Victoria has a renewable energy target of 40 percent for this year. They have established an aggressive aspiration to increase it to 95 percent by 2035. State and federal officials will have a hard time making good on these goals. Mountain voiced concern about the lack of progress being made towards these targets. “We’re not on target in Victoria and we’re not on target nationally at all,” he stated, adding that while ministers claim otherwise, he believes that assessment to be inaccurate.
We hope to see what’s next on the Victorian government’s agenda! In September, they are going to have an auction to determine which renewable energy projects will be prioritized for construction. This auction is a godsend at this pivotal moment while stakeholders are still reeling from the cancellation of projects such as Gippsland Dawn.
Mountain underscored the deep ramifications of Blue Float’s decision to withdraw from the project. Further, he said, they didn’t make a serious effort to sell non-essential assets. He stated, “It is surprising that [Blue Float] did not manage to find someone else to buy their operations, so that indicates [there is] not a huge amount of interest from others in taking over the options.” He warned that this disinterest might undermine otherwise strong projects stuck in similar limbo.
Impacts on the Renewable Energy Landscape
The retreat from Gippsland Dawn could be a bad omen for other offshore wind projects in Australia. Mountain warned, “I think it will impact others … and others that are not in a strong position will be weakened by this.” Both the state and federal governments are promoting rapid expansion of renewable energy resources. The big projects leaving could delay our progress to meet these imperative goals.
