A stone’s throw beyond the surfers at Merewether, a plume of spray shoots into the air. A humpback is making its way up the east coast. Further out, about halfway to the horizon, there’s a line of ships lying at anchor, waiting their turn to enter the Port of Newcastle for loading. To the north, a ship full of coal is leaving the world’s biggest coal export port and heads out to sea.

“On a clear day like this,” says Richard Finlay-Jones, squinting into the brilliant midwinter sunshine, “you might just see the tips of the turbine blades and maybe some rotors.”

Finlay-Jones is pointing to the horizon. One of the most ambitious engineering projects ever undertaken in this country is planned for 20 kilometres off the coast of Newcastle – an array of floating offshore wind farms, the next generation of renewable energy technology.

Finlay-Jones is Newcastle born and bred. He’s been surfing at Merewether since he was 10. He’s also the developer of Newcastle Offshore Wind, one of a number of projects proposed for the Hunter-Central Coast Renewable Energy Zone, announced by the federal Energy minister, Chris Bowen, in February this year.

“It’s a nation-building project,” says Finlay-Jones. “If we get this right, it’ll drive the economy of this region for decades to come.”

Simon Byrnes, chief commercial officer at the Port of Newcastle, tells The Saturday Paper the opportunity is “huge”. He says offshore wind could drive the 1.5-gigawatt electrolyser planned for the port’s clean energy precinct, which garnered a $100 million grant from the federal government last year.

Offshore wind could also play a crucial role in decarbonising Australia’s largest coal port, powering new manufacturing industries and meeting Australia’s climate goals. There is a stumbling block, however: the Department of Defence has demanded a 46-kilometre exclusion zone around the Williamtown air base, just north of Newcastle, which houses most of the RAAF’s F-35A Joint Strike Fighters.

Defence’s no-go area has pushed the proposed site for wind farms further out to sea and limited the available area in which developers can build.

Riikka Heikkinen, of Skyborn Renewables, says developers are “pretty much in the dark” about what the exclusion zone will mean. “Besides the 46-kilometre radius around Williamtown, the level of any official information from Defence has been minimal,” she tells The Saturday Paper.

Project developers, unions and Business Hunter, the region’s peak business group, are calling for the offshore wind area to be expanded. They say the Defence exclusion zones could delay development and deter investors.

“If we don’t get things moving, investors will just move on from Australia,” says Andy Evans, chief executive of Oceanex Energy, an Australian company that wants to install 130 floating turbines under the plan.

“There’s so much international capital out there that needs to hit ESG [environmental, social and governance] goals. It’s very much an investment game as well as a saving-the-planet game.”

Australia is competing for that investment capital with countries such as Thailand, Vietnam and the Philippines. “If we don’t move quickly to make it easier for large investors to build these projects that will deliver emissions reduction and jobs for our kids, we’ll be left behind,” Evans says.

Ian Learmonth, chief executive of the Clean Energy Finance Corporation, recently warned installation of new large-scale renewables was still “well behind the pace” if Australia was to meet Labor’s target of 82 per cent of electricity from renewables by 2030.

Offshore wind won’t come online in time to contribute to the 2030 target, but Learmonth tells The Saturday Paper it would be “very important for the medium to longer term needs” of the National Electricity Market. To meet the climate goals legislated by the federal government last year, and electrify every part of the economy, the Australian Energy Market Operator predicts the country will need to double the amount of electricity it generates by 2050.

Learmonth says institutional investors are “looking very closely” at offshore wind in Australia, “but there’s still a little bit to play out in terms of demonstrating to those sources of capital the economic case for investment”.

According to Riikka Heikkinen, a veteran of the onshore wind industry in Finland, international competition for investment is “fierce”. Australia is not just competing for investment money but also for hardware. Turbine manufacturers already have full order books and the vessels needed to install them at sea are contracted years in advance.

The ocean off Newcastle and the New South Wales Central Coast is a prime location for offshore wind. There’s existing transmission infrastructure from retiring coal-fired power stations and a reliable wind pattern that complements the generation profile of onshore wind and solar.

Because of the depth of the ocean, however, turbines can’t be mounted on the seabed. Instead, they’ll need to float. A prototype floating wind farm has been operating off the coast of Scotland since 2017. Others are under construction, and the United States, Britain, Japan and France all have current tenders for floating offshore wind. By the time developers in Australia are ready to begin construction in about 2030, Heikkinen says, floating wind will be commercially proved at scale.

Chris Bowen says offshore wind can create 3000 to 8000 new jobs a year, drive economic growth in regions such as the Hunter, and reduce emissions. Former ACTU climate and energy adviser Mark Wakeham, who studied offshore wind in Denmark and Germany for a Churchill Fellowship, says the “visible hand” of government industry policy will be crucial to establishing an offshore wind industry in Australia. Seeing that hand at work, in the form of firm government targets for offshore wind, sends a clear signal to investors that “okay, this is happening”, says Heikkinen, a signal whose value “cannot be overstated”.

“The biggest driver for offshore wind is the transition,” says Finlay-Jones. “The transition from the coal supply chain to offshore wind is the best thing that could happen for the port.”

The Port of Newcastle has already set a goal of generating more than 50 per cent of its revenue from non-coal sources by 2030.

Glen Williams, Newcastle branch secretary of the Maritime Union of Australia, says almost every job his members do at the port has some sort of reliance on coal. They also know change is coming. “Our members don’t necessarily love coal. They love the good secure job it’s given them, and the good conditions. Offshore wind goes a long way to delivering that.”

Williams says offshore wind has the potential to be a massive generator of jobs in the future. It’s not hard to see why: turbine towers up to 200-metres high will need to be constructed on dry land at the port, dropped into a wet zone for further work, then loaded onto barges and towed out to sea.

“The size of the infrastructure involved will stretch even our capabilities,” says Port of Newcastle’s Simon Byrnes. “We’ll probably have six of these towers floating around in the port at any one time.”

The technical and logistical challenge is huge, but Byrnes says Newcastle could potentially service offshore wind installation not just on the east coast of Australia but also in New Zealand. For the industry to reach that sort of scale however, would require expanding the current area for development southwards of Newcastle along the NSW Central Coast – or a compromise from Defence.

According to Finlay-Jones, whose Newcastle Offshore Wind project proposal was bought earlier this year by France’s EDF Renewables, one of the largest renewable energy companies in the world, Defence “have always had difficulties with the location of the renewables and how they interact with their operations”. However, he says, EDF Renewables has been “assured by Minister Bowen that Defence is working with cabinet to address any concerns”.

Minister Bowen was tight-lipped when asked by reporters at the closure of the Liddell Power Station about calls to expand the offshore wind zone. “The zone is smaller than, say, Gippsland, for very good and important reasons – Defence-related reasons,” Bowen said. “That won’t change.”

His department will announce its response to the 1900 public submissions it received shortly. Community groups are concerned any expansion of the wind zone southwards could affect whale migration, tourism and the national surfing reserve at Norah Head.

Gregory Andrews, Australia’s first threatened species commissioner, says the science shows Australia’s whales do face serious threats – but not from offshore wind farms. The biggest threat to whales, Andrews told the Coast Community News this month, is climate change.

The Defence Department declined to comment when contacted by The Saturday Paper.

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