Australia has some of the world’s best offshore wind conditions, but other territories such as China and Europe are decades ahead in sustainable offshore wind energy generation. If the technology is mature, why is it so difficult to deliver locally?
Words by Chris Sheedy
There are several levels to answering the question of why Australia currently has zero offshore wind capacity. It’s not a single blocker, but instead a layered set of challenges that include engineering, regulations, and commercial, environmental and social constraints and, since the pandemic, increasing costs and uncertain supply.
At the same time, said Alexander Newcombe, GHD’s Technical Director for Wind, nothing is getting in the way. Not any longer. After all, while it takes time and drive to build a new industry from scratch in a new market, with 13,000 turbines already installed in the ocean worldwide, there are existing solutions we can draw from.
“There are challenges, of course, but offshore wind is happening right now,” Newcombe told create. “It’s a completely new industry in Australia. It’s not just a new project; it’s a new sector, and potentially new ports and new transmission networks. So it does take time to do it the right way.
“That means setting up the regulatory framework to make sure the projects are built in an environmentally and socially sustainable way. Outside of the actual wind farm, there is a lot that needs to go into offshore wind to make it a success.”
Offshore wind delivery is inherently multidisciplinary and logistics-heavy, Newcombe said. Projects include foundation design and geotechnical investigations; wind, meteorological and oceanographic measurements; and electrical design, array cables, export cables, offshore and onshore substations, and more.
In China and Europe, these systems evolved over decades. In Australia over the last 10 years, they have been developed in parallel.
As James Perry MIEAust CPEng, EPC Director at Star of the South, an offshore wind project targeting 2.2 GW of capacity in Gippsland, said: “We’re starting from scratch.”
Enabling a new industry
The offshore wind challenges in Australia began with the fact that an enabling regulatory framework had to be developed. It didn’t exist until recently.
“When Star of the South was originated, it had to follow a development pathway under a lot of oil and gas regulations,” Perry said. “We completed our first offshore geotechnical engineering assessment and geophysical assessment using an exploration license under the oil and gas regime.”
Star of the South is now credited with stimulating the need for a unique offshore wind regulatory environment.
“That has now come. We now have the Offshore Electricity Infrastructure Act and the regulations that go alongside that. We have a regulator. We have a registrar. We have licensing of seabed. We have regulation on the state-side for Victoria, and we have legislative targets from Victoria. So there has been a whole lot of progress and work already.”
Still, that regulatory regime remains largely unproven until a project is up and running, said Jenny Mitchell, General Manager of Policy and Advocacy at Engineers Australia.
For engineers accustomed to delivery pathways, standards and other guidelines that are tested and proven, this matters. New regimes suggest uncertainty, less-than-efficient processes and potentially longer timeframes, particularly when responsibilities are split between Commonwealth and state.
Mitchell said this is not an unfamiliar challenge in innovative major infrastructure delivery.
“With any new regime, the legislation does need to be tested and it does need the kinks ironed out,” Mitchell said. “Of course, the best way to do that is to progress a project to construction and operation.”
Beyond the turbines
Because Australia’s best offshore wind sites are so well-suited, the technical engineering of the country’s first offshore wind farm is not particularly difficult, at least by global standards.
“A lot of the engineering challenges we have here in Gippsland are not significant compared to what has been achieved around the world, and compared to the challenges more mature markets are currently facing,” Perry said.
What makes a suitable offshore wind site? The main ingredient is obviously high and reliable wind speeds. Shallow water is another important inclusion, as is suitable seabed conditions that make monopile foundations, the cheapest and most mature foundation solution, feasible. After that, the nearer the proximity to market and to existing transmission infrastructure, the less challenging the project becomes.
According to the Australian Energy Market Operator’s Integrated System Plan, as 90 per cent of coal-fired generators in the National Electricity Market are projected to retire by 2035, transmission infrastructure must adapt. The Gippsland region’s transmission capacity is already strong due to the legacy of coal-fired power generation.
“Gippsland is a great location because of the legacy that coal has left, and the connection hubs with the power plants at Yallourn and Loy Yang,” Perry said.
Offshore wind also delivers high volumes of energy per kilometre of new transmission investment. “If you look at building transmission to move electrons around, building offshore wind zones in Gippsland gives you far more electrons per kilometre of transmission investment than any other option.”
But it’s not all plug-and-play. More connection hubs must be delivered. That work is already happening for the Gippsland project. VicGrid is developing the transmission line to connect two GW of offshore wind energy to the grid.
“The line will use 500 kV double circuit overhead transmission technology, starting near Giffard and connecting to the Loy Yang Power Station switchyard,” VicGrid said.
Gippsland, with all of its unique characteristics both offshore and onshore, and with its pre-existing infrastructure, is considered Australia’s most suitable offshore wind location. But it still tosses up unique challenges.
For example, construction of offshore wind systems isn’t just about what’s in the water, but also what’s on the coast. The sector relies on large, specialised ports and a fleet of installation and maintenance vessels. Australia has neither.
Infrastructure Australia, in its 2025 Infrastructure Market Capacity Report, said that “the import and local transport of large components such as wind turbines can be constrained by existing port or road infrastructure”.
What’s unique about ports that can handle the demands of offshore wind facilities? The assembly of turbines, with hub heights over 150 m and rotors measuring more than 230 m in diameter, requires deep-water ports, heavy-lift capacity and large laydown areas, all of which are limited domestically.
Various constraints, including logistics and supply chain availability, feed back into engineering decisions, Perry said.
“We may be limited by the water depth we can use to a port. And if you’re limited by the water depth, you become limited in terms of the vessels you can select. So you start to reduce the supply chain down, and there’s already a very small supply chain for these large vessels. And then maybe you start to limit the type of foundation you can use.
“So, if you look at just the site without the context, it might be a great, constructible site. But once you start to add in the need to transport monopiles out to the site – or maybe we need to select a jack-up vessel that is capable of sailing to a specific port, and it needs to be able to carry monopiles that distance – you may start limiting the logistics options that are available.”
Have costs increased?
Offshore wind has always carried a premium over onshore renewables for obvious reasons. However, it also offers significant added value.
“If you only look at the levelised cost of electricity on a spreadsheet, there are benefits that aren’t easy to understand,” Newcombe said.
Offshore wind typically generates more consistently at night and in winter, when solar and onshore wind are less productive or unproductive, complementing Australia’s high levels of solar penetration.
Cost is an enormous factor in decision-making, and while greater cost efficiencies are expected as the sector matures, the first movers, along with government and regulators, will need to bear the costs that come with setting up a new industry.
“It’s not just about being the first project,” he said. “Setting aside the regulatory environment and the technical feasibility of these ambitious projects, there is also the social licence to consider. Unlike onshore wind, you’re not putting turbines into people’s backyards, so to speak.
“But there are still social licence issues to address, whether it’s because of the visual amenity – they could be seen from shore – or because of environmental impacts on birds and marine ecosystems, and even the potential impact on other industries such as fishing and tourism. These costs need to be viewed in comparison to the advantages of offshore wind.”
Interestingly, as the cost of everything has been increasing, some prices in the offshore wind supply chain are going down. This is because the offshore wind sector has experienced turbulence globally. Delayed auctions, withdrawn bids and cost and supply chain issues in the small and specialised offshore wind space has meant some suppliers are cutting prices.
“Vessel suppliers are looking at reducing their charter rates because they want to keep their assets moving. One of the key things needed is a clear pipeline, so turbine suppliers and vessel suppliers can see it’s not just a one-off.”
The cost of wind power over time
It’s no surprise that offshore wind has always carried a cost premium compared to onshore wind and solar, but it fills a valuable gap and its trajectory has followed a familiar pattern in terms of infrastructure cost.
According to CSIRO, renewables remain the lowest cost range of new build electricity technology, despite future onshore and offshore wind costs being revised upwards.
“This competitive position reflects the decade of cost reductions experienced by wind, solar photovoltaics and batteries prior to the pandemic, while costs of their more mature competitors have remained flat,” CSIRO’s GenCost 2023-24 report said.
According to that report, offshore wind remains more expensive than onshore wind and large-scale solar due to higher capital costs, as well as the need for specialised vessels and the greater construction risk.
However, that cost will flatline as the technology matures in Australia.
A simple breakdown of cost per kW for fixed and offshore floating wind
| Cost component | Fixed offshore wind ($/kW) | Floating offshore wind ($/kW) |
|---|---|---|
| Foundation | 597 | 2393 |
| Remainder of cost | 4065 | 4065 |
| Total cost | 4662 | 6458 |
SOURCE: GenCost 2025-26 report. Apx Table A.1 Cost breakdown of offshore wind
Birds, fish and people
One of the most complex elements of offshore wind delivery in Australia is the environmental one. Each project must assess potential impacts on marine ecology, migratory birds, whales and more.
For Star of the South, a multi-year, comprehensive marine ecology survey program working with leading scientists and research agencies has provided strong baseline data to work from.
“Some questions are difficult for us to answer because of the scientific evidence that’s currently available,” Perry said.
Bird collision risk modelling is a key example.
“One of the inputs you need is species-specific avoidance behaviour. That data exists in Europe for local species, but there’s limited data here.”
And so, Australian projects must reach for conservative worst-case assumptions that increase uncertainty and potentially constrain design.
Underwater noise needs to be carefully managed during construction. Piling turbine foundations in the seabed requires significant energy, generating noise which travels underwater, potentially impacting noise-sensitive marine species such as whales. Engineers have developed innovative mitigation technologies to address this, including double-bubble curtains which release a wall of bubbles around piling activity to dampen sound.
Then there’s the question of skills. Does Australia even have the people it needs to manage such projects?
“Engineers Australia has been able to demonstrate through research how transferable engineering skills are into renewables and greener industries,” Mitchell said. “Unsurprisingly, the research found that the technical engineering skills are overwhelmingly transferable.”
In some cases, there is a training gap, but it’s often around specific jargon or the use of particular standards.
“What can be more challenging is the breadth of capabilities like stakeholder management, community engagement and negotiation skills that can be expected of engineers for clean energy projects. Government, industry and education providers need to work together to make pathways clearer for engineers to move into offshore wind.”
Upskilling Australians
Newcombe, who trained and worked in Denmark, including roles with Ørsted and the Danish Energy Agency, cautioned against assuming European delivery models can be simply transplanted. “The technology is proven,” he said. “The first-mover anxiety isn’t about technology. It’s about the Australian-specific market conditions.”
Perry agreed, saying that while plenty of talent can be brought in from other territories, no project wants to make the importing of skilled specialists a significant part of its business model.
There will be benefit for everyone in upskilling Australians in constructing, maintaining, operating and decommissioning offshore wind farms.
“Star of the South skills mapping with both the coal and the oil and gas industries shows 70 per cent of those workforce skills overlap with offshore wind. With a level of training, it will bring great opportunities.”
This article was originally published in the May 2026 edition of create.
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