Offshore Electricity Infrastructure Bill 2021
I’m thrilled and delighted to speak in support of the legislation before the House today, the Offshore Electricity Infrastructure Bill 2021 and the associated bills. This legislation has the exciting capacity to contribute so much to our transition to a net zero economy. This legislation is very timely, because it comes in a week that has been so significant for Australia’s efforts to reduce its climate change emissions. I see these bills as part of the government’s plans to make sure that we meet that target we’ve recently formally adopted, making sure that Australia achieves net zero emissions by 2050. It is timely, because it is legislation like this, and all that will flow from it, that is going to allow that technological revolution, which is already having such a significant impact, to continue.
The bills focus on a couple of areas but chief amongst them is the creation of opportunities for offshore renewable wind energy. It’s interesting to think about the technological transformation that has occurred during the course of our history. Wind energy is in fact one of the oldest technologies, when you think about how many civilisations, how many nations, how many communities, were powered in a maritime context by wind over so many thousands of years. Yet now we are seeing that technology that was supplanted by fossil fuels during the 19th and 20th centuries reach a new forte in a different context, and these bills are about allowing that to occur. It is that type of technological transformation that we are seeing in so many areas of our economy and society that is going to be the vanguard of ensuring that not just Australia but the world achieves its goals to contain emissions and reach net zero.
That’s why this legislation in particular is so important. It is legislation that is delivering real, practical and meaningful opportunities for us to reach our targets. It’s exactly the type of legislation that should have priority in the parliament today. It reflects the fact that the transformation of our electricity sector, which this will support, is well underway. The bills will allow the development of offshore renewable electricity sectors in Commonwealth waters. We have as a nation, as an island continent, some of the largest marine territories in the world.
Offshore renewable energy infrastructure has the potential to help meet our environmental objectives not only of reducing emissions but also of creating such significant investment and job opportunities across our country. It will add to our technological prowess and skills. However, it’s extraordinary to believe that in fact things like offshore wind farms are effectively not permitted under current Australian law. Without the regulatory framework proposed in this bill, there is no clear pathway for investors to pursue large-scale offshore renewable energy projects.
This legislation will provide industry and the community with the certainty it needs to invest in offshore electricity infrastructure projects. The bills establish a regulatory framework to enable construction, installation, commissioning, maintenance and decommissioning, and the operation of those offshore electricity assets. It is a comprehensive regime that is outlined in the bills, and it provides that framework that I know that industry has been so keen to see established. It will permit the minister to declare specified areas suitable for offshore renewable energy infrastructure activities and establish an appropriate licensing regime. It will permit, for the first time, offshore wind farms and also, importantly, provide a framework for projects like Marinus Link and Sun Cable, which I will talk a little bit about further. The government estimates that, just with the three most advanced projects—those two I’ve mentioned, Marinus Link and Sun Cable, and the Star of the South wind farm proposal—it could deliver investment worth $10 billion and create over 10,000 jobs during their construction. And they will all provide ongoing jobs to support their operations.
The legislation will contribute to the transformation underway in electricity and support the development of clean energy just when we need it most. It’s worth reflecting on the fact that almost a quarter of electricity generated in the NEM is coming from renewable sources, and that solar and wind is now accounting for 99 per cent of new electricity generation capacity in Australia. Of course we know from the projections that were confirmed in the plans released yesterday by the Prime Minister that our renewable energy capacity is expected to exceed 50 per cent by 2030, and it will go on and on, and by 2050 it will be a major contributor in us reaching our net zero target. Our task in that context is to assure that renewable energy can be accommodated within our transmission systems, within our electricity and energy systems, at higher and higher levels, and this bill will contribute to that goal.
The bill builds on what I do think is the government’s strong record of supporting renewable energy projects and critical grid infrastructure. I see it in the context of the work that we’re doing to support that massive expansion of the Snowy Hydro scheme, which is going to be the largest energy storage project in the Southern Hemisphere, and in the work that we’re doing to support the deployment of new renewable capacity, particularly solar, which is now happening faster than almost any other economy in the world. We, in fact, now have the most solar per person of any country in the world and more solar and wind than any country outside of the European Union. Through agencies like ARENA and the Clean Energy Finance Corporation, we have invested something like $11.2 billion into over 800 clean energy projects, with a total value that now exceeds $39 billion when you include the leverage that they’ve given to spark private sector investment. We’ve established a $250 million program to support the construction of critical new transmission lines, including projects like EnergyConnect, VNI West and of course Marinus Link, about which I will talk bit more.
I am particularly excited about the potential of offshore wind farms. It is an area where we are seeing technological advancement. Like so many areas of the clean energy transformation, we are seeing costs come down. We’re seeing turbines get better. We’re seeing technology improve, which will particularly benefit Australia in the deployment of wind farms in deeper waters. This is why organisations like the International Energy Agency say offshore wind is going to be one of the big three in the future energy development. It, in fact, predicts that wind will provide a third of global electricity demand by 2050, by which we’re aiming to reach our net zero target. Offshore wind can operate at a capacity which is equivalent to coal and gas in some regions and double the capacity of traditional solar panels. Offshore wind has larger capacity because it deploys bigger turbines than their terrestrial cousins and therefore is a beneficiary of the more constant and reliable wind found in the maritime environment. When there has been some controversy about the placement of some wind farms on land because of their location, it obviously has the benefit of having less visual impact than traditional wind sources. There is also the potential to locate offshore wind farms not only offshore but also close to existing industry ports and transmission services. Globally, by 2030, wind farms could be generating 200 gigawatts of power.
To date, the big players in the offshore wind sector have been the United Kingdom, most famously perhaps through its work in the North Sea—I was going to say North Shore, but we’re not quite there yet!—China and Germany, which account for 70 per cent of offshore wind farm generation. But we’re seeing a rapid scaling up of offshore wind generation in other parts of the world, Across Europe, Netherlands comes forth, for example. We’re seeing expansion in the UK with Prime Minister Boris Johnson flagging his intentions for an even greater role for offshore wind farms, and we’re also seeing an expansion in our own region, in the Asia-Pacific. In the United States, a nation which perhaps surprisingly has done relatively poorly in relation to offshore wind generation, the Biden administration has announced its support for a rapid expansion of the sector. I think I read that at the moment the United States only generates something like 42 megawatts of electricity from offshore wind. The president’s goal is to see that expand to 30 gigawatts over the course of the next decade. Our goal as a nation should be to join them, and Australian’s waters, our maritime territories, are well suited to this task.
As Geoscience Australia has noted, we have some of the best wind resources in the world, and it stands to reason that that is the case. Many of these opportunities have been outlined in an excellent report I recently read by the Blue Economy CRC, which was released in July this year. It found that Australia has abundant offshore wind resources in a range of locations, with, perhaps not surprisingly, the strongest resources occurring in southern latitudes. These include areas like the south of Tasmania, in Bass Strait, off the south west and south-east coasts of the continent and off other parts of Western Australia, Queensland and my own state of New South Wales. In fact, Australian offshore wind resources are comparable, if not greater than, those areas that have been the centre of a lot of activity in the North Sea off Britain and Europe.
Due to the depth of our waters and the nature of the continental shelf, one of the challenges that Australia has experienced is the capacity to deploy offshore wind by using the traditional technology of being able to effectively anchor to the seabed. That becomes more challenging the deeper your oceans and your waters are, but this is a game where technology is providing the solutions that we will need. We are now at the point where we are seeing the commercial development and deployment of floating offshore wind technologies which overcome those barriers of ocean depths. It is a fact that so far most offshore wind farms have been fixed technology with foundations on the seabed. However, floating wind technology does provide extraordinary potential for our own nation.
There are many projects that are under development that will support offshore wind. In fact, I think there are something like 10 that are under development today. I want to highlight one of these—the Star of the South project off Gippsland, because it is probably the most advanced. It highlights what potential we have. If developed to its full potential, the Star of the South will generate up to 2.2 gigawatts of new capacity, which would power the equivalent of 1.2 million homes across Victoria. Some have said that it will provide as much as 20 per cent of Victoria’s current energy needs.
The offshore wind farm Star of the South is proposed to be located between seven and 25 kilometres off the south coast of Gippsland, near towns such as Port Albert, Mclaughlins Beach and Woodside Beach. The project includes a transmission network of cables and substations to connect the offshore wind farm to the Latrobe Valley. The project will use underground cables for most of the transmission line, unless it’s not technically feasible or where overhead lines would have lower impacts. Three potential route options have been investigated with one taken through to detailed planning. We are likely to see, with this legislation, and with all of the approvals that will follow, the investment start delivering power by the end of this decade.
Projects like Star of the South do more than just provide cheaper and cleaner energy; there are huge economic benefits that will come from this project. It would create 2,000 direct jobs in Victoria over its lifetime, including 760 Gippsland jobs during construction and 200 on an ongoing basis. It would mean an investment over its lifetime of something like $8.7 billion in the Victorian economy. As a New South Welshman, I’m delighted to see Victoria benefit in that way!
But this is just a sample of what the future can hold for us. I also want to briefly mention that this bill is not just about offshore wind potential; it envisages technologies that are still a twinkle in a scientist’s eye. It will also better support the deployment of undersea cables to allow, within Australia, a better connection of renewable energy resources—I’m thinking particularly about the Battery of the Nation project in Tasmania, which has such extraordinary potential. This bill will allow Mariner’s Link to occur in a more orderly fashion. There is also our export potential as a nation. What has excited me are those proposals for cable connecting Singapore to northern Australia and our capacity, through solar power, to generate a new energy export to Singapore. Again, this legislation will support Sun Cable in proceeding as that cable winds its way across the sea to link, in a new way, Australia with one of its closest friends, the Singapore nation.
I strongly support this legislation. It is about providing the future for our energy sources, and it is going to help us meet our goal of net zero emissions by 2050. I commend the legislation to the House.