Call for Australia’s offshore wind deals to protect against inflation

Danish renewable energy giant Orsted says Australia’s first offshore wind farm deals must contain critical protections against inflationary shocks as the industry reels from soaring costs that have forced the cancellation of projects in the United States.

Orsted’s head of market development in Australia, Albert Quan, said Australia had all the ingredients for a thriving offshore wind sector and was attracting strong international interest despite being a vastly smaller market than Europe, the US and Asia. Ahead of a competitive auction process, Quan flagged that Orsted would be seeking a long-duration contract to increase revenue certainty and reduce the cost of capital, as well as indexation to increase the price of power in line with rising inflation.

Victoria’s world-class wind resource, combined with a strong state government target to source two gigawatts from offshore wind by 2032 and nine gigawatts by 2040, had given companies such as Orsted and other global players the confidence to invest. Expressions of interest for the first tranche of offshore wind projects will start later this year, before final contracts are awarded later in 2026.

The government signalled it also intended to grant a licence for a second Orsted project in a neighbouring permit area, subject to First Nations consultations.

Source: Energy Industry News (energyindustrynews.net)

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