What is needed to successfully develop an offshore wind industry in New Zealand

Do you see offshore wind playing a part in the future of New Zealand’s energy system?

Aotearoa has long considered itself fortunate to have a relatively high proportion of renewable energy production (hydro, onshore wind and geothermal), however there is now a significant and renewed focus on New Zealand’s electricity generation portfolio and the changes that are required to meet both increasing energy demands and New Zealand’s net-zero carbon by 2050 aspiration (with these zero emission targets now reflected in legislation).

As a country brimming with renewable energy resources, this has recently led to a focus on new opportunities available to New Zealand to leverage its low-emissions resources – this includes offshore wind.  Although, to date, no consent applications (under the Resource Management Act environmental consenting regime) have been made for the development of offshore farms, it is starting to emerge as a topic of discussion at a national and regional level.

The New Zealand Government has identified both opportunity and interest in the development of offshore windfarms – for example through the “Wind Generation Stack Update” report published by the Ministry of Business, Innovation and Employment (as part of its ‘generation stack’ which is developed to assist with the government’s modelling of how forecast electricity demand may be met).  The Wind Generation Stack identifies potential sites for offshore wind, takes a view as to costs and likelihood of development and also the hurdles for the development of offshore wind in New Zealand (such as cost, supporting infrastructure and size of market).  Given historic views that offshore wind has simply not been an option in New Zealand, it is significant that this report identifies sites and considers that “the possibility of offshore wind in New Zealand cannot be ruled out.”  Whilst this may not appear as a resoundingly positive statement, it is most certainly a step in the right direction!

Is the potential of offshore wind recognised by Te Waihanga – New Zealand’s Infrastructure Commission?

The opportunity for offshore wind is now on the radar of New Zealand’s infrastructure body, Te Waihanga New Zealand Infrastructure Commission.  The Commission recently released its 30-year Infrastructure Strategy for consultation which identifies the opportunity for offshore windfarms to play a significant part in New Zealand’s future energy system, thereby leveraging our low-emissions energy resources and supporting the net-zero strategic direction.  However it considers that they are not yet commercially competitive. The strategy frames this within the wider economic benefits for New Zealand:

By harnessing our low-emissions energy resources alongside other complementary technologies like hydrogen, we could treble our annual electricity supply.  If we harness these resources, we can attract energy-intensive industries to grow our economy, create higher paying jobs and improve our quality of life.  This is good for us and it’s good for the planet.

There are a number of industry bodies that have a strong interest in the potential of offshore wind – this includes Ara Ake, the government-backed national new energy development centre with the mission of supporting New Zealand’s transition to a low emissions future.  Ara Ake has a dedicated conference (held for the first-time last year, and again in November 2021) for the future of offshore energy which includes a significant focus on offshore wind opportunities.  This is supported by other industry bodies including the New Zealand Wind Association and the Aotearoa Wave and Tidal Energy Association.

What are some of the challenges you think will need to be overcome?

As with any change, we need to make sure we have the right settings to enable the opportunity to be realised.  For offshore wind in Aotearoa, this includes the need to critically examine the regulatory settings (including the planning system) and to ensure that we have the right supporting infrastructure in place.  A key constraint is the infrastructure required in a long skinny isolated country to support the development of offshore wind – planning of offshore windfarms will for example no doubt require hand-in-hand strengthening of the transmission grid.  The potential for offshore wind to anchor green hydrogen and e-fuels industries will also need to be carefully considered.

The Taranaki region is a logical place to start when thinking about offshore wind – it could be regarded as New Zealand’s traditional energy centre as the home of the oil and gas sector – and now home to Ara Ake.  In this regard, it has managed licence blocks for the oil and gas sector (and understands that regime) and sits on a coast with a wonderful offshore wind resource.  Taranaki also has a concentration of infrastructure and technical expertise, and an economy that has supported and understands the importance of the energy sector to New Zealand.  Energy production enjoys a social licence in this region which is not always the case across the rest of the country.

How we gear up for large projects is front of mind not just in the energy sector but more widely as New Zealand looks at a significant programme to address its infrastructure deficit in a sustainable decarbonised way.  Across the board there is a conversation about how the infrastructure sector can deliver on this programme – energy, transport, water, and social infrastructure.  This conversation is required at a national coordinated level to consider how the programme is delivered including through supporting infrastructure, legislative frameworks and resources.

What types of skills will be required for the offshore wind industry?

A skilled workforce – including a highly skilled services sector – is critical to enable these opportunities to be realised.  We need to be gearing up and engaging with the whole eco-system that is required to deliver large projects – from engineers and designers, market modellers and technical forecasters, project managers, planners, lawyers, economic and commercial advisors – and critically the iwi and the community.

Whilst offshore wind will be new to Aotearoa and we will want to access international knowledge, experience and expertise, there is a skilled workforce in New Zealand, particularly in Taranaki from its oil and gas history, that can be leveraged.  There are also a range of skills that are unique to and can only come from within New Zealand – in particular in relation to iwi engagement.

Offshore wind projects require years of development activity before construction starts.  From a jobs and skills perspective this means that people will be employed, and services contracted, well before any construction activities are started.  The teams in the Taranaki region who have supported the development and operation of the offshore oil and gas sector have the right skills and experience to pivot to the development of this industry – from the issues faced in consenting, onshore infrastructure or seafloor conditions.

The offshore wind sector is infrastructure heavy with strong dependence on ports, transmission and construction supply chains.  The experience globally is that planning for the growth of the industry is required from the outset and collaboration between stakeholders is key.  There will be exciting opportunities to support the industry by managing government relations at national and local level and ensuring that the different voices and concerns are heard and addressed.

I see that the development of the offshore wind industry in Aotearoa can play a key part in our long-term infrastructure goals and help us build a skill base which is transportable to other industries and can also be exported across the region.

This article was first published on page nine of Haumoana: Offshore wind capacity building in New Zealand.

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