Australia’s 5 Core Challenges For Its Burgeoning Offshore Wind Industry

Offshore wind has been highly successful overseas, with China, Germany and the UK leading the way. 

The Australian Government introduced the Offshore Electricity Infrastructure Bill in 2021, which facilitates and regulates offshore wind facilities on Australia’s waters. Since then, there are over 20 offshore wind farms in development across the country. 

At face value, offshore wind remedies the issues that onshore projects have. Viable land isn’t taken up, no noise for neighbours (as there are none), and it doesn’t disrupt the natural landscape. Additionally, offshore wind farms are more efficient than their onshore counterparts, clocking 3.5MW compared to the average of 2.5-3 for land turbines. In conjunction with more than 85% of the Australian population living within 50km of the coast – offshore wind will be a good option for Australia. The positives are clear and as the Federal Government has now made it possible and state governments are funding these projects, clearly they see its worth. 

However, the real question is: is Australia ready for it? 

Challenge 1: Infrastructure Readiness

One of the biggest hindrances to the renewable energy transition, which is certainly not unique to Australia, is the lack of infrastructure and / or the need for it to be modernised. Offshore wind is a new ballgame; we’re dealing with volatile conditions (i.e. the ocean), and as this is new to Australia, some unique problems and setbacks will occur, and we need to be prepared. 

One of the significant infrastructure questions is related to the utility infrastructures. Infrastructures such as substations, transmission lines are critical to connect and distribute the energy generated from turbines to the grid. Therefore, it’s ideal for offshore wind projects to be located as close to the existing substations as possible. This will make it easier and quicker for offshore wind power to be utilised. Additionally, the environmental impact is significantly less as the structures have already been developed.

The question of how to hold the turbine needs to also be answered. According to the International Renewable Energy Agency, rooted turbines are restricted to water up to  50 metres deep. In deep water, the traditional turbine infrastructure is not sufficient. Therefore, it will require the use of floating foundations to make it feasible. A benefit of floating turbines is that they are less impactful on the environment. However, it’s still relatively new, and while there have been some successful projects utilising this technology, it’s still more expensive than fixed-bottom turbines.

The Australian Government made the preliminary decision to grant feasibility licences for several offshore wind projects, including the Spinifex Offshore Wind Farm in the Southern Ocean off the Victorian coast, on March 6, 2024. Additionally, the Southern Ocean region off Victoria has been declared a priority area for offshore wind development. This area covers 1,030 km² and has the potential to generate 2.9 GW of power. Public consultation has been a significant part of the process, with over 3,000 submissions received from community members, local governments, and businesses between June 28 and August 31, 2023. This ensures that the development of offshore wind projects considers the views and concerns of local communities.

Challenge 2: Costs

Dealing with high water depths and requiring maritime engineering to build the structures, the upfront installation costs for offshore wind projects are significantly high. The average upfront cost in 2018 for a 1000MW offshore wind project was estimated to be more than US$4 billion, according to the International Energy Association. In comparison, onshore wind projects roughly cost US$1.75 billion, making offshore projects more than double the cost.

However, the landscape is evolving. The National Renewable Energy Laboratory (NREL) reports that the costs for offshore wind projects are expected to decrease significantly over the next decade. The IEA predicts costs to drop by as much as 40% due to advancements in technology, economies of scale, and increased competition.

Despite the high initial costs, there is substantial state and federal government support, along with significant international interest in bringing offshore projects to Australia. This support includes grants, subsidies, and tax incentives aimed at reducing the financial burden on developers. For instance, the Australian Government has allocated funds specifically for renewable energy projects, including offshore wind, to help offset these high upfront costs.

Moreover, the global trend towards renewable energy is driving down costs. The UK, for example, has seen a 66% increase in the ceiling price for offshore wind projects in its 2024 auction, reflecting the growing investment and interest in this sector. This trend is likely to influence the Australian market positively, making offshore wind projects more financially viable over time.

As projects increase and technology continues to improve, the prices should become more reasonable. The development of floating foundations, which are less impactful on the environment and can be used in deeper waters, is also expected to contribute to cost reductions. While still relatively new and more expensive than fixed-bottom turbines, floating foundations offer a promising solution for expanding offshore wind capacity.

In summary, while the initial costs for offshore wind projects are high, the combination of government support, technological advancements, and international interest is expected to drive down costs, making offshore wind a more feasible and attractive option for Australia’s renewable energy future.

Challenge 3: Environmental Impact

While onshore wind projects have their own negative impact on the area’s ecology, offshore wind projects have their own set of challenges. As offshore wind is still burgeoning, the adverse effects aren’t fully realised yet. However, there are already some issues, which are based on:

Ecosystem Disruption

There will inevitably be disruption from the building of any structure, whether on land or in the ocean. Habitats can be easily destroyed by installing pylons. However, there have been instances where artificial reefs, made up of steel structures and even shopping trolleys, have brought flora and fauna to the area and created new habitats. This phenomenon has also occurred on offshore wind turbines in the US. Additionally, research has found that the pylons going into the far depths of the ocean are increasing benthic habitats (hard bottom fauna such as mussels, oysters, and sponges that lie on the seabed).

Underwater Noise

The ocean is a noisy place. For many marine animals, sound is used as a means of survival, and they are consequently sensitive to it. Disruptive noise can impact group cohesion, survival behaviour cues, and cause hearing loss. Additionally, while still largely unknown, there have been concerns about the effect wind farm noise may disrupt fish chorusing, which can consequently affect successful reproduction and physiological alterations. An impact analysis conducted before construction has been put forward as a possible solution to mitigate the impact.

Electromagnetic Fields

With the need for electric infrastructure to transmit the energy harnessed from offshore wind to the electricity grid, electromagnetic pulses will be transmitted. This can have a significant impact on sharks, rays, and skates, as they use electromagnetic fields to sense prey and are highly sensitive to it. While this can’t be prevented, it could be mitigated by conducting impact analysis prior to construction.

Community Impact

The environmental impact is not just for the animals but also for humans. As we’ve seen with lithium mining and solar farms, environmentalists and renewable energy enthusiasts often have conflicting views. Additionally, Australians are generally more conservative when it comes to projects that disrupt the natural landscape. While offshore wind is not directly on the shore, the closest farm thus far is only 7km away. Getting the community onside is critical—their opinion matters and can influence politicians, potentially putting offshore wind projects in jeopardy.

Recent Developments and Mitigation Measures

To address these environmental concerns, several measures have been proposed and implemented:

– Avoidance and Minimisation: The Offshore Coalition for Energy and Nature (OCEaN) has identified 80 measures to minimise potential environmental impacts on marine ecosystems. These include careful planning and design, noise minimisation tools during construction, and informed, science-based curtailment during operation.

– Nature-Inclusive Design: Adopting nature-inclusive designs and restoring nature on- and off-site can help mitigate the impact on marine ecosystems.

– Extended Operational Lifetime: Extending the operational lifetime of offshore wind structures, where appropriate, can minimise additional pressures on biodiversity during the decommissioning process.

Challenge 4: Experience / Manpower Shortage

Australia faces a significant skills shortage, particularly in the highly specialised field of offshore wind projects that require nautical engineering expertise. Finding such expertise is challenging even in the best of times, and now it is near impossible. However, the benefit we have is time. With offshore wind projects only just coming into development, we can lay the groundwork now to ensure that by the time they’re ready to be operational, we have a workforce that can manage them.

Solutions and Strategies

– Investing in Education and Training: Investing in conversion programs for graduates and developing specialised colleges focused on renewable energy and offshore wind technology are crucial steps. These programs can help equip new graduates with the necessary skills and knowledge to enter the offshore wind industry. Additionally, retaining existing skills from the oil and gas industries is vital. Workers in these sectors, particularly those with offshore experience, possess transferable skills that are highly relevant to offshore wind farms and other renewable energy projects.

– Leveraging Transferable Skills: Those working in the fossil fuel industry, especially in offshore roles, have the necessary skills to contribute to offshore wind farms. As renewable energy becomes more prominent and fossil fuels phase out, providing work for displaced employees can help fill the skills gap. This transition not only supports the renewable energy sector but also offers continued employment opportunities for workers affected by the decline of fossil fuels.

– Global Recruitment: Looking globally for expertise is another viable solution. Offering visas to experts and professionals from countries where offshore wind has matured, such as Denmark, can bring valuable experience and knowledge to Australia. These international experts can help prevent mistakes made in the past and train Australian workers, ensuring a smoother transition and development process.

– Government and Industry Initiatives: The Australian Government and industry stakeholders are also taking steps to address the skills shortage. Initiatives such as the Offshore Wind Workforce Development Program aim to create a pipeline of skilled workers through apprenticeships, training programs, and partnerships with educational institutions. Additionally, collaborations with international organisations and companies can provide access to best practices and advanced training methodologies.

The National Renewable Energy Laboratory (NREL) highlights that the global offshore wind industry is facing similar challenges, with a significant shortage of experienced workers. This underscores the importance of proactive measures to build a robust and skilled workforce in Australia. The UK, for instance, needs to attract and retain an average of 10,000 people per year to manage its offshore wind project pipeline. Learning from such international experiences can help Australia develop effective strategies to address its manpower shortage.

While Australia faces a significant challenge in terms of manpower shortage for its burgeoning offshore wind industry, a combination of education, training, global recruitment, and government initiatives can help build a skilled workforce. These efforts will ensure that Australia is well-prepared to meet the demands of its offshore wind projects and contribute to the country’s renewable energy future.

Challenge 5: Maintenance

Offshore wind O&M (operations and maintenance) is another issue facing this particular renewable energy. The harsh marine environment poses unique challenges for maintenance. Engineer divers are essential for underwater inspections and repairs, but the shortage of skilled divers exacerbates the problem. The high demand for these professionals, coupled with the increasing number of offshore wind projects, makes it difficult to meet the maintenance needs.

In addition, operations and maintenance costs are a significant portion of the total lifecycle costs for offshore wind farms. These costs include day-to-day maintenance, major component replacements, and logistics. The industry has seen a 7% increase in costs and lost revenue due to maintenance challenges, particularly with aging assets and supply chain issues for essential spare parts.

What’s more, unplanned maintenance can lead to unexpected costs and downtime. The fast pace of technological advancements in turbine design means that newer models may not be fully matured, leading to reliability issues and increased maintenance needs.

Innovative Solutions

– Digital and Data Analytics: Leveraging advanced digital and data analytics technologies can significantly improve maintenance efficiency. By using sensors and data from offshore wind turbines, operators can gain insights into asset performance and site conditions, enabling predictive maintenance and reducing unplanned downtime.

– Remote Operated Vehicles (ROVs): The use of ROVs for underwater inspections and repairs is becoming more common. These vehicles can perform tasks that are dangerous or difficult for human divers, improving safety and efficiency.

– Condition-Based Maintenance (CBM): Implementing CBM strategies involves monitoring the condition of equipment and performing maintenance only when necessary. This approach can reduce maintenance costs and improve turbine reliability.

– Innovative Maintenance Techniques: There have been many proposals to efficiently maintain offshore wind farms. One of the most interesting is the use of jet packs. Initially trialled with paramedics to respond to offshore wind emergency incidents, this technology could potentially be adapted for use by technicians in the future.

– Collaborative Efforts: Industry collaborations and benchmarking tools, such as McKinsey’s Offshore Wind Operations and Maintenance Benchmarking tool, help operators assess their performance and identify areas for improvement. These tools provide insights into cost performance, availability KPIs, and safety metrics, enabling operators to optimise their O&M strategies.

Offshore wind can change Australia’s renewable energy landscape for the better. It’s even better as we have the advantage of having a clean slate – we can learn from other countries and build our offshore wind farms without making the same mistakes. However, as with any new (and very exciting!) project, we must be prepared.  While offshore wind has a lot of promise, we must be mindful of our impact on the ocean and our communities. We need to do right by them to ensure cohesion and support. 

If you’re looking to navigate the challenges of offshore wind projects and need expert recruitment solutions, we’re here to help. Contact us to discuss your recruitment needs and how we can support your journey in building a sustainable and skilled workforce for the future.