Offshore wind: moving confidently through the feasibility phase

Developers have already been granted the first licences to assess the feasibility of developing offshore wind farms in Gippsland, Victoria. As more developers secure their licences and embark on the seven-year feasibility stage, the natural question developers are asking is: “Where do I start?”.

Understanding Australia’s regulatory environment

The feasibility stage is crucial in the journey towards offshore wind development. It is a complex programme management exercise, requiring developers to navigate Australia’s regulatory environment while ensuring critical activities run smoothly and on schedule. 

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Australian Offshore Wind Market Supply Chain Assessment and Gap Analysis

As developers embark on the feasibility stage, it is essential to kickstart the process by preparing a comprehensive management plan for activities within their awarded licence area. Another critical aspect for developers to consider in parallel is their connection to the power grid. Each developer must apply for a Transmission and Infrastructure Licence (TIL) to cover their export corridor from their licence area to the relevant boundary between State and Commonwealth waters. Reassuringly, The Regulator has released drafts of what they expect from developers when submitting the above plan and licence application, with follow-up guidelines and templates due for release in mid-June 2024. 

Developers must also consider each state’s jurisdiction and identify activities that require additional licences. For instance, while geophysical surveying is typically an activity that does not need management plan approval, certain geotechnical surveys do require approval, depending on specific planning nuance. Additionally, each declared area has its own set of local contextual requirements. For example, in New South Wales, as with many other declared areas, developers need to consider Department of Defence, airport clearances, and height restrictions. 

Although this environment may seem complex, the above issues are by no means novel or untested, with survey work happening in State waters and on land for decade, and a 30-year legacy for offshore wind development to draw on globally. 

Our team’s extensive experience in offshore wind and marine infrastructure development, coupled with our deep understanding of the Australian regulatory environment, uniquely positions us to support developers through the feasibility stage and beyond. With over 20 years of experience in key workstreams, our Australian-based sectoral leads are well-equipped to guide projects over the next few years.

Setting a clear partnership agenda

In Australia, unlike the UK, there is no centralised strategic governance for collecting and sharing data to prepare a strategic environmental assessment across designated areas. Despite being commercially counterintuitive, developers can benefit by working through the feasibility stage to gain a strategic advantage through collaborative partnerships.

This is especially true at this early stage, where the focus is on establishing a supply chain, building community trust and a social licence, and sharing knowledge, intelligence, and resources, which greatly benefit all involved. This collaborative approach helps establish a baseline understanding and accelerates progress. Partnering early in the feasibility phase can foster cooperative outcomes, ensuring smoother and more efficient project development. 

Self-organised think tanks, working groups, and other peak bodies will prove invaluable in helping pool ideas and resources. Our team has built strong relationships with numerous developers, supporting them throughout the feasibility licensing process and fostering and seeding collaborative relationships at the licence application stage. We are well-positioned to connect developers with mutual needs, facilitating collaboration and driving progress within the industry.

Accelerating projects at the speed of trust

Offshore wind projects rely on various industries to support the transition to cleaner energy. However, the progress of any project hinges on the speed with which credible community trust is built based on genuine ongoing participation, engagement, and partnering. Developers play a crucial role in helping communities grow alongside the project. To build trust, communities must be engaged early and have a voice in decision-making processes. 

With the prevalence of misleading reporting surrounding offshore wind, transparent and accessible communication with the community is essential. Providing factual updates and addressing concerns is vital. Suppose developers collaborate and unify their message to the public…In that case, this will reduce the risk of conflicting messaging while helping to show the community that there is a willingness to put people ahead of profit. 

Confidence and trust in renewable energy projects are paramount for First Nations communities. Developers can establish a legacy by ensuring projects are consensual, respectful, and empower effective community participation to benefit Sea Country. 

By committing to equitable governance structures and tapping into traditional knowledge, developers can deliver benefits for First Nations businesses and communities, fostering sustainable growth and collaboration.

Submarket

Offshore wind

Success factors

In 2021, when Australia was contemplating an offshore wind industry, our firm authored a report for the World Bank demonstrating the key success factors for developing offshore wind in emerging markets such as Australia. As a global collaboration, the report consolidates the common themes agnostic of the market that drive projects to successfully reach a positive financial investment decision (FID) and the strategic, policy, framework structure, and delivery mechanisms that define the rule book for developers. The factors are not complex or new, but they do require a clear applied holistic understanding of the industry and sector to successfully capitalise on these factors. These success factors are highlighted in our World Bank report, defining the reasons why the regulators and developers continue to seek technical guidance and thought leadership from our team right across the offshore wind project lifecycle. 

So, where do I start? 

Returning to the initial question, developers are well-progressed in defining their Project Development Plans, activity registers and programmes, so they already have the basic ingredient-mix for success. However, the next critical step is to integrate, sequence, and consolidate multiple work packages overarching workstreams as resources are onboarded. At this same time, it is also crucial to maintain influence and impact externally. 

Critically, this means pushing for government support and a clear policy framework. It highlights the importance of responding to the draft guidelines and informing regulators about practices and learnings from overseas developers. As important, is forming key industry partnerships to drive collaboration and innovation, reduce costs, and opt for those comfortable win-win outcomes that do not compromise intellectual property.

Lastly, developers must seek credible advice in an emerging market with limited experience and knowledge. While there is a market to service any developer, it is neither mature nor sophisticated enough to integrate across the 60-plus work packages that will need delivering over the next few years. 

We are across all facets of the offshore wind sector, helping us connect, coordinate, and manage regulator, developer, service provider, stakeholder, and community relationships. We are also uniquely experienced as an integrated service provider in the offshore wind industry in Australia within a breadth and depth resource in the local market who bring a practised technical, commercial, financial, regulatory, supply chain, route-to-market CV to help mobilise, manage, and interface the feasibility activity program helping develop best-for-project solutions that bring applied knowledge and insight from inception. 

To learn more and find out how we can support you, reach out to start the conversation.