In March 2025, Associate Principal Alister McCowan, Senior Associate David Kark and Associate Angus McNab, authored an article ahead of the Australian Federal election titled, Australia’s energy transition at the crossroads: Offshore wind turbines or nuclear reactors?
The article examined the innovation potential of offshore wind vs nuclear—and what it means for Australia’s future. In particular, the impact these generation options may have on Australia’s status as a net importer of technology. The authors argued, there may be greater potential for Australia’s offshore oil and gas industry to bring its innovation efforts to bear on offshore wind.
The re-election of the Albanese Labor Government in May was a win for renewable energy and took nuclear generation off the table for the foreseeable future. But will this win be enough to kickstart an offshore wind industry in Australia?
Alister McCowan, a mechanical engineer with extensive expertise in renewable energy systems, provides his insights.
Potential for an Australian offshore wind industry
Global offshore wind players clearly see potential in a future Australian offshore wind industry. Patent filings between 2002 and 2022 have Australia as the 10th most popular filing destination for owners of offshore wind related international patent families. More recently, the Federal Government received 37 applications for the 12 feasibility licences they granted in 2024 for offshore wind projects off Gippsland’s coast in Victoria.
Offshore wind in Australia is not ‘cheap’
However, there is no denying that the economics of offshore wind is not an easy sell in Australia. This is clear from the numbers CSIRO released in its GenCost 2024-25: Final Report in July – a levelised cost of electricity (LCOE) between 94 and 192 A$/MWh (fixed offshore wind) does not stack up well against 24 to 54 A$/MWh (large scale solar PV) and 52 to 87 A$/MWh (onshore wind). So it is unsurprising that the plug has already been pulled on one of the 12 projects granted a feasibility licence in Gippsland, due to a lack of commercial viability, or that the only project outside Victoria offered a feasibility licence, the Novocastrian Offshore Wind Farm in the Hunter offshore wind zone, has decided not to proceed.
Where to from here?
Offshore wind proponents will be hoping that the Victorian Labor Government’s upcoming offshore wind auction, building on its legislated generation targets, will provide new impetus and the requisite level of investment certainty to get the fledgling industry off the ground.
Clearly, any Australian industry initially would be entirely dependent on imported technology. The question will then be whether there is any appetite to invest in local R&D that could reduce this technology deficit.
