The ability to build and connect a large volume of renewable energy through a single project could be a valuable resource to mitigate against risks of a disorderly transition of electricity generation sources later in the decade, as coal fired power plants close.

The larger opportunity for offshore wind however is as a source of electricity for green hydrogen production for port-based export facilities, local heavy industry (e.g.‘green steel’) and as a transport fuel. Where it is co-located with industrial ports or offshore gas infrastructure, hydrogen produced by offshore wind could have competitive advantages.

Newcastle is one of the Australia’s centres for coal power generation with strong power grids and is one of the largest coal export harbours worldwide. The Munmorah coal power station south of Newcastle had a capacity of 1,400 MW and closed in 2012. A further four coal fired power stations with a total capacity of 8.5 GW in the Upper Hunter Valley and Central Coast areas arescheduled to close in future years. Newcastle is home to large industrial loads such as the Tomago Aluminium smelter drawing 950MW, steel makers Molycopand Liberty, and the Orica chemical plant.

The best of the offshore wind resources for NSW is seen at Newcastle, where capacity factor exceeds 39% (44% 50km offshore), with the lowest correlation to the onshore wind resource (31%), and out of phase with solar PV. The narrowness of the NSW coast limits the accessibility to this resource to floating systems, butoffers immense opportunity proximal to Australia’s largest energy demand. Existing infrastructure includes not only a strong transmission grid, but highly developed port facilities, steel mills,fabrication and manufacturing facilities and a skilled workforce.

The current actual peak load of New South Wales is at around 13.5 GW. The modelled total installed capacity of all variable power generation plants is 28 GW, including 10 GW solar, 9 GW onshore wind and 9 GW offshore wind.