Powering Change: Australia’s offshore wind boom

Bree Miechel:

Hello and welcome to Ashurst Business Agenda and our first episode in this special Powering Change mini-series for 2025 where we'll be delving into the findings of Ashurst's latest Powering Change report. Over the past five years, Ashurst has, through our Powering Change reports, surveyed the global energy sector on its views on clean energy and its future. This has given us a comprehensive data set, offering unique insights into the way the market is evolving and the barriers businesses face, as well as the steps they can take to overcome them and stay ahead of their rivals. In what is a rapidly evolving global energy market, understanding the way these trends are impacting technology, investment and policymaking is more critical than ever.

My name is Bree Miechel and I'm a Partner in the projects and energy transition team at Ashurst. I have experience in Asia, the Middle East and Australia, and I'm currently based in our Sydney office. I specialise in procurement and development of projects across asset classes globally, but today we are interested in the exciting offshore wind sector, which brings me to our special guest today, Rory van Weerdenburg, Project Director of Gippsland Skies, a consortium of Australia and international companies, including Mainstream Renewable Power, Reventus Power, AGL, DIRECT Infrastructure with a shared mission to harness the power of offshore wind together.

Rory van Weerdenburg is the project director of Gippsland Skies Offshore Wind. He's an Australian national and experienced project director specialising in early phase development of deep water, fixed bottom, and floating offshore wind projects. Rory has more than 17 years' experience in offshore projects across renewables and oil and gas, having held technical, commercial and management roles, including nine years in Western Australia, working in sub-sea projects before moving to Europe to pursue opportunities in offshore renewable energy. Ashurst is currently supporting Gippsland Skies in relation to its proposed development of a 2.5 gigawatt offshore wind project in the Gippsland declared area. Thank you for joining us today, Rory.

Rory van Weerdenburg:

Great to be here. Thanks, Bree.

Bree Miechel:

To begin, let's start by sharing with our audience a bit about Gippsland Skies.

Rory van Weerdenburg:

Yeah. Thanks Bree. Always happy to talk about our project. Gippsland Skies is one of the first offshore wind projects in Australia to be awarded a feasibility license. That came last year in the first tranche of awards in the Gippsland declared area back in April 2024. Ours is a large fixed bottom offshore wind project and our seabed license covers an area of about 626 square kilometres, and we look at that as having the potential to build out up to 2.5 gigawatts of offshore wind power. That 2.5 gigawatts, in turn, could power up to 1.4 million Victorian homes and contribute about 17% of the state's generation needs. It also has the potential to generate substantial economic benefits to Australia, including more than 3.7 billion economic value add to the Australian economy. But potentially more importantly, also has the potential to create over 4,700 jobs in Australia over the 40 plus year lifetime of the project with almost 2000 of those actually being in the Gippsland region.

We're slightly unique when compared to the majority of feasibility licenses that have been awarded. And important to note, I guess, that there were 12 licenses awarded in Gippsland initially, and we're unique in that we sit approximately 30 kilometres, just over 30 kilometres from shore in what is called the part three of the Gippsland declared areas. Now, for those that are familiar with how things look on the map, that is the western-most of the three parts that make up the entirety of the Gippsland declared area.

It's a really great place for an offshore wind project and obviously we were thrilled when the licenses were awarded and we saw the full landscape there.

The part three area in particular is great because it has the strongest wind speed of all of the Gippsland declared areas, which, intuitively, is one of the most important factors when citing an offshore wind project. Even small increments in wind speed have a really meaningful impact on the energy that you can produce and then, therefore, the cost-effectiveness of that energy. We're really fortunate to have a strong team that we're growing here in Australia with backing from a mix of international and local shareholders. What I'm really excited about is the privileged position that we're in to be able to combine strong international offshore wind experience with really deep domestic insight into the Australian energy market and network.

Bree Miechel:

Now we have some background on Gippsland Skies and its project off the coast of Gippsland in Victoria. It would be great to explore the opportunities and issues facing offshore wind projects more generally in Australia.

Rory van Weerdenburg:

Yeah. Great question, Bree, and it certainly is an attractive market for offshore wind developers at the moment. Now, that wasn't always the case. When I first started looking into Australia as a potential growth market for offshore wind, it was actually quite a hard sell and it certainly didn't rank within the top global prospects that we had in the system we used at the time. What's really changed that position over the last three years is the rapid and comprehensive rollout of the regulatory frameworks required to support offshore wind project development as well as the policy commitments needed to achieve the legislated targets that exist in Victoria for offshore wind.

Now that all started with the passage of the Offshore Electricity Infrastructure Act back in 2021 and was followed by the establishment of the Declared Areas and Facilitation of License award last year. That all happened more or less as forecast, and that in itself goes a long way to creating the opportunities for but also the confidence in investments in Australia and helps demonstrate that this is a developed stable environment with a competitive and advanced market economy. I can reflect that a lot of the markets that we had originally ranked higher than Australia as attractive for offshore wind investments haven't moved anywhere near as quickly as the Australian market has.

Bree Miechel:

Even with all these developments, there are a number of challenges facing offshore wind development in Australia and around the world. The Powering Change report shows that, globally, a lack of infrastructure is considered the main barrier for renewable energy investments with a lack of government support ranking third. Rory, what do you see as the key challenges facing successful development and construction of offshore wind projects around Australia? And perhaps more importantly, what are some of the ways in which those challenges are being or will be addressed?

Rory van Weerdenburg:

Yeah. Look, I think it's important to note to start with that this is the first time that anyone in Australia has done offshore wind and that includes governments, regulators, and industry. And that's not to be underestimated in a challenge in, and of, itself. But these challenges have been successfully met in other countries. In fact, many of our team members have direct experience in that and we're quite excited about the opportunity to tackle some of those in Australia and in Victoria. Supporting infrastructure is critical. You can't build an offshore wind project without a grid connection and you certainly can't build an offshore wind project without suitable port infrastructure within the region. That's why we have a dedicated team looking into port utilisation, understanding what capability there is currently in the region and working through how we might structure a construction campaign around that. Offshore wind turbines are obviously quite large, so there are some specific requirements for them to be marshalled through any port.

We know that the Victorian Government is working hard on these critical issues and they're doing that through bodies such as VicGrid and the team in offshore wind energy Victoria. We're really looking forward to further updates on the evolving framework of support needed to achieve the Victorian state's ultimate target of nine gigawatts of offshore wind by 2040. But what we've seen in other markets is that arriving at that optimal solution will really require close and good collaboration between developers, government and community to ensure that there's a strong social license to operate. So that's a really critical factor. And where these projects will be built by developers, ultimately, they're going to form part of the critical infrastructure of the state to help power individual homes and businesses. So it's natural that building social license should be and really is at the heart of our approach to development.

Bree Miechel:

Picking up on your comments on social license, Rory, Ashurst's Powering Change report reveals that over half of organisations expect their energy transition approach to lead to disputes with pressure groups and governments. In Australia across the renewable energy industry, there has been a material increase in focus on social licence issues in recent years, a trend expected to continue for offshore wind. How important is establishing a positive relationship with the local community and stakeholders and how do you go about fostering that?

Rory van Weerdenburg:

It's critical. Offshore wind development is complex, but it is fundamentally local. So strong and enduring relationships with the communities in which we plan to operate, it's really the foundation of our approach to development. We're always really keen to listen and learn from stakeholders and locals, and we've spent quite a lot of time out in the community since our license award last year. I've in particular really pushed all of our team members regardless of what their role is in the project to take time to go out and join in to our community engagement events to really get to know the local environment and the communities that we're seeking to be a part of. I've really been pleased at the uptake on that and almost all members of the Gippsland Skies team have gone out and taken the time to do that. We've run a number of dedicated engagement sessions throughout last year, starting in July, and we've also been involved in some of the collaborative industry-wide forums. Throughout all of those, we've really had some great feedback that we've taken away now and are looking to work into both our development plans and designs to take that forward in a way that really seeks to respond to some specific community needs and concerns.

We do recognise the importance of approaching community engagement with values like respect, safety, and integrity, and we've seen how important that is in order to establish social license in other markets globally. We're really committed as a team to ensuring that we take an equally careful and considered approach to our development here in Australia. We're aiming to work in partnership with the region's Traditional Owners, local communities and stakeholders in order to make sure that we carry out our development in a way that addresses local needs and really supports regional development as best that we can. We're confident that we can do that by leveraging both the global experience of our team, but also their experience here locally in Victoria and in Gippsland.

Bree Miechel:

Before we wrap up this episode, I would like to have a look at the forecast for offshore wind globally. Following recent events in the US as well as tenders in the UK and Denmark, the industry is facing headwinds in certain markets. What are your views on the future for offshore wind over the next five to 10 years?

Rory van Weerdenburg:

I think it's certainly fair to say the industry on the whole is facing some specific challenges at the moment, but equally there is a huge growth potential there as well. Particularly considering some innovations in technology and commitments that many countries still have to work towards their global net-zero ambitions. I also think there's a fantastic opportunity here for Australia to push forward whilst some of these setbacks might affect other markets more heavily. We've seen globally that where governments really want to deliver offshore wind projects, they've been shown to be able to learn and adapt and keep growing the industry. We've seen that setbacks can also result in really good outcomes in the future. I think allocation round number five in the UK was a great example there where it in itself failed to attract any new offshore wind project bids. That was a first for that market, but we saw that they went away from that and they made changes. They adapted the strike price cap and when they came back for the subsequent round, that saw the award of around five gigawatts of new offshore wind projects. So I think that's a really great example of adapting to what might be viewed as a setback and using that to springboard and to attract and improve and ensure that new projects continue to come down the pipeline.

I'm heartened because I've seen both Australia and Victoria, in particular, show how eager it is to learn from other jurisdictions. And I think it's a really major benefit of Australia being where they are slightly behind other more mature markets. It's a really privileged position to be able to take and borrow best practice from other markets and to learn from experiences and ensure that things here are done really efficiently and effectively. I think it's also important to note when we talk about offshore wind developments, we're talking about really large utility scale infrastructure projects. And, as with any complex infrastructure project, innovative solutions are needed and we have a really good feel for the challenges that we face, and we now have a really committed and dedicated team here in Australia focussed on tackling them with integrity and determination. We're really excited about the future of offshore wind in Australia and really keen to see the benefits that it will bring to Gippsland and to Victoria.

Bree Miechel:

I think that's a great note to close our discussion. Thank you very much, Rory, for your insights today. I hope our audience enjoyed the discussion.

Rory van Weerdenburg:

Thanks so much for having me, Bree.

Bree Miechel:

Thank you for listening to this episode of Ashurst Business Agenda. This episode, as mentioned, is part of our special Powering Change miniseries. To find out more about the issues explored in this episode, download our Powering Change report from the Ashurst website. You can find the link to the report in the show notes to this episode. To make sure you don't miss any future podcasts, subscribe to Business Agenda on Apple Podcasts, Spotify, or wherever you get your podcasts. And while you're there, please feel free to leave us a rating and/or review. Thanks very much for listening, and goodbye for now.