Building an offshore wind sector in Australia: economic opportunities and constraints at the regional scale

Abstract

The recent passage of the Offshore Electricity Infrastructure Act (2021) (Cth) opened up the potential for Australia to produce renewable energy at unprecedented scale. Six regions have been identified as potential locations for developing offshore wind projects, promising thousands of new local jobs to legacy industrial regions. This paper charts the regulatory framework for Australia’s offshore wind industry and how it positions local economic benefits in the licencing of projects. It then draws on interviews with key stakeholders supported by media and policy analysis to examine the early development of offshore wind capability in one of the proposed regions, the Illawarra, in NSW. Here existing steelmaking capacity positions the region to play a key role in supply chains for local and potentially national projects, but considerable structural and geographical constraints in the labour market will need to be addressed. In light of overseas experience indicating that economic benefits often fall short of promises, greater attention by policy makers is required to ensure hosting communities can develop local skills in the industry and facilitate their relative supply chain capabilities. This paper also calls for careful evaluation of early projects to allow for adjustments to policy settings as the industry matures domestically.