Australia’s green energy transition is expected to suffer a major setback, following speculation that Spain-based wind developer BlueFloat Energy - one of the nation’s largest offshore wind producers - is contemplating exiting its clean energy interests from the Australian market.
While Bluefloat has declined to comment, undisclosed sources believe that a selldown of BlueFloat's Australian interests would be a major blow to the country's clean energy targets, especially given the delayed major electricity transmission line between NSW and Victoria.
Last year Bluefloat secured a feasibility licence to develop an offshore wind project off Victoria’s Gippsland region and also won a preliminary development licence in NSW’s Illawarra region.
Bluefloat's decision to sell up its Australian assets would be yet another blow to Victoria, which despite being Australia’s most fossil fuel dependent state, aims to reach 95% renewable electricity generation by 2035.
While two of the state’s largest coal-fired power stations, Energy Australia’s Yallourn and AGL Energy’s Loy Yang A are due to close within the next decade, the major Victoria-NSW electricity interconnector project has been hit with a fresh two-year delay due to farmer opposition.
It’s understood that the VNI West project will now be completed in 2030 as opposed to the original deadline of 2028.
BlueFloat's potential withdrawal from Australia is expected to raise alarm bells at both federal and state levels, with Prime Minister Anthony Albanese and Victoria's Premier Jacinta Allan both backing offshore wind as a key pillar of Australia’s decarbonisation strategy.
Victoria which has placed offshore wind at the centre of its decarbonisation strategy is ambitiously targeting nine gigawatts of offshore wind capacity by 2040, which it expects to be sufficient to power more than 6.5 million homes.
This offshore wind capacity is expected to replace the state's largest coal-fired power plants.
However, the offshore wind industry is exposed to major headwinds, and the associated costs, logistical barriers, lack of transmission infrastructure, and port capacity may be some of the reasons why BlueFloat wants out.
Meantime, while Norwegian energy firm Equinor is also yet to formally accept an offshore wind development licence in NSW, the International Energy Agency warns that global costs for offshore energy projects have risen by around 40% due to supply chain woes and persistently high inflation.
Meanwhile, Victoria remains committed to its clean energy plans and is committed to launching the first stage of its contracts-for-difference auction, which is expected to determine the industry’s true viability.
The state plans to build renewable energy zones covering 7% of the state's land area, with 5.2 million solar panels, nearly 1000 onshore wind turbines and four new transmission projects to provide 95% of its electricity by 2035.
