Why Are Australian Wind Farms Losing Money?

In this episode, Allen, Joel, Phil and Rosemary analyze why 38% of Australian wind farms are struggling with profitability despite stable PPAs. They explore how solar saturation, coal plant inflexibility, and maintenance contract structures impact returns. Plus, the team examines BlueFloat Energy’s withdrawal from New Zealand and what recent auction results in Maine reveal about the broader challenges facing floating offshore wind development.

Sign up now for Uptime Tech News, our weekly email update on all things wind technology. This episode is sponsored by Weather Guard Lightning Tech. Learn more about Weather Guard’s StrikeTape Wind Turbine LPS retrofit. Follow the show on Facebook, YouTube, Twitter, Linkedin and visit Weather Guard on the web. And subscribe to Rosemary Barnes’ YouTube channel here. Have a question we can answer on the show? Email us!

Pardalote Consulting – https://www.pardaloteconsulting.com
Weather Guard Lightning Tech – www.weatherguardwind.com
Intelstor – https://www.intelstor.com
Wind Energy O&M Australia Conference – https://www.windaustralia.com

Allen Hall: It is almost fall. I guess it is fall.

Joel Saxum: It’s almost November.

Allen Hall: I was just outside today. It was like 70 degrees outside. It felt like the end of summer, not the beginning of fall. But we’re almost in winter. We got another month or two before we hit the official start of winter, which means all the bears up in my area are starting to thinking about hibernating.

But in the meantime, they’re usually pretty hungry, trying to fatten up before the winter really hits. And This causes a lot of problems if you’re around bears, and a lady in Montana had a problem where she went out to work in her pickup truck early in the morning and realized that it had been all torn apart by a black bear, of all things, which is the thing that I worry about the most around here.

At this time of year, when you’re bringing in things from the house, and a bear shows up and says, Oh, there’s groceries in the car, hops in, and then panics, which is what happened to this lady. The bear panics and just destroys the vehicle. And this has happened very close to us, actually. And not that long ago, it was this summer, where bears were walking in our driveway, walked right by my wife, she didn’t even know it was there.

So it’s serious that don’t leave your car doors open. That’s the one thing I remember in the fall. Don’t leave your car doors open for any length of time. Otherwise, when you go back, you may have befriended a bear.

Philip Totaro: Allen, I’ve seen videos where they’re opening car doors. So don’t even think about, you can close the door and they’re still gonna get in.

So I don’t know, man. They’re getting sophisticated out there.

Joel Saxum: I’ve got another tip for you from my childhood. You always put your trash out in the morning. Before your kids go to school, before you go to work, put your trash out in the morning on the street. Because if you put your trash out outside of your garage the night before, you’re gonna end up with trash all over the ground and the garbage man won’t pick it up and you, i.

e. me, as a young child, would have to go pick up all of our trash multiple times. So that’s the hot tip.

Allen Hall: It’s either the bears, the raccoons, or the wildcats. Those are the ones you really have to watch out for. Get a cat down in your neighborhood because it can do a lot of damage.

Joel Saxum: You would think that Allen lived in like Northwest territories or something and not in Massachusetts.

Allen Hall: I can walk out my back door and pet deer right now. That’s how close they’re sitting next to the house. Cause it’s hunting season also where I am and all the deer join into town. They’re hanging up. Yeah, there’s, they’re not stupid. Joel, he’s in the Berkshires. This is the wilderness. This is about as wilderness as you can get in Massachusetts.

Welcome to the Uptime Wind Energy Podcast. I’m your host, Allen Hall, and I’ll be joined by my Uptime co host, Chris. After these news headlines. New England’s floating offshore wind sector marked a milestone as their Bureau of Ocean Energy Management selected winning bids totaling 22 million for four lease areas in the Gulf of Maine.

Two lease areas were awarded to Avangrade Renewable for areas approximately 35 miles from Massachusetts, while Invenergy Offshore Wind secured two leases about 25 miles from the coast. The combined areas covering more than 625 square miles At the potential to power over 2. 3 million homes, this marks the first offshore commercial sale for floating offshore wind on the Atlantic coast, supporting the administration’s goal of deploying 30 gigawatts of offshore wind by 2030.

In Texas, Nova Clean Energy has secured interconnection agreements for a 1 gigawatt wind power portfolio. Construction is set to begin in late 2025, with power delivery scheduled for the winter of 2026. These projects located in the Delaware Basin and Central Gulf Coast will include co located battery storage.

International energy giant BP continues its strategic shift away from renewables under new leadership. The company is now considering a minority stake sale in its offshore wind business. which has a project pipeline of nearly 10 gigawatts but no operational farms. This follows BP’s early decision to put its U.

S. onshore wind energy business up for sale, which currently operates nine facilities across seven states with 1. 7 gigawatts of generating capacity. The company has also paused new offshore wind project bidding and plans to reduce its solar exposure through a stake sale. in light source BP, marking a significant pivot in its energy transition strategy.

A startup backed by Breakthrough Energy has secured an additional 4 million in funding for its innovative floating wind platform. Aikido Technologies will launch its pilot project this fall, featuring a design that reduces assembly footprint by 75 percent and enables deployment from 80 percent of U. S.

ports. And a delegation of 19 Dutch wind industry executives met with the Connecticut officials at The State Pier in New London, Connecticut, to explore collaboration opportunities in offshore wind development. The Dutch group, representing expertise from cabling to marine biodiversity, aims to share decades of experience from their domestic market, where wind power supplies up to 50 percent of the country’s electricity.

The meeting coincided with construction at the State Pier, which is serving as the staging area for the Revolution Wind Project. Both sides emphasize the potential for joint research, shared knowledge, and manufacturing partnerships to reduce costs in the offshore wind energy sector. And French energy company Total Energies has announced plans to study A major renewable energy project in Morocco, the Shibika project, could combine one gigawatt of wind and solar capacity to produce green ammonia for export to Europe, potentially creating a significant hydrogen production hub.

That’s this week’s top news stories. After the break, I’ll be joined by my co host, renewable energy expert and founder of Pardalote Consulting. Rosemary Barnes, the CEO and founder of IntelStor, Phil Totaro, and the Chief Commercial Officer of Weather Guard, Joel Saxum. As wind energy professionals, staying informed is crucial, and let’s face it, difficult.

That’s why the Uptime Podcast recommends PES Wind magazine. PES Wind offers a diverse range of in depth articles and expert insights that dive into the most pressing issues facing our energy future. Whether you’re an industry veteran or new to wind, PES Wind has the high quality content you need. Don’t miss out.

Visit PESWind. com today. So if we’ve been following along in Australia, Andrew Forrest’s Squadron Energy has about a 14 gigawatts of a development pipeline and they have announced plans for the Bookham Wind Farm project in New South Wales. That project will be, it looks like 99 turbines, With a capacity of almost 600 megawatts, so six megawatt turbines there.

The project includes battery storage, and it is one of the several products that are happening in Australia at the minute. Now, I did a little bit of research on this project, and one thing, there’s a lot of details about it, but the one thing I could not find is what turbine they were going to install at the site.

I, my first thought, Phil, was it was going to be some Vestas turbines, but it’s pretty quiet. Usually, Vestas will announce that they’ve had a sale in Australia, but they won’t tell you where. You just connect the dots on the amount of power or the number of turbines, and then you can connect it up.

But in this case, you can’t. What are the options here, Phil? And what is likely to happen?

Philip Totaro: They have options like Vestas. They also have options like Goldwind that offers a 6x platform. They could buy GE. Squadron historically has opted for, Western OEMs, but they’ve been considering, their options lately on, on Chinese OEMs.

The reality of this is, if they, this is, so let’s take a step back. Squadron’s got, I want to say more than a hundred gigawatts worth of projects proposed now in Australia that usually involve hydrogen or, there’s some kind of hybrid mega project like this where, they’ve got batteries and solar and, an enormous amount of wind, obviously, that’s going to be built out in phases.

But the reality of this is promising for the market, but they, I’ll turn it over to Rosemary, who’s gonna, re educate us yet again on, like, why Australia probably doesn’t need this much. Wind, solar, and certainly hydrogen generation from, about eight or nine different megaprojects that have now been proposed across the whole country at this point.

Again, fingers crossed that this gets downstream enough that they can announce orders for turbine vendors and things like that, but I cannot imagine that 100 percent of these, hydrogen producing projects or renewable energy hub projects actually get built.

Rosemary Barnes: But is this a hydrogen one?

I thought it was just a vanilla wind farm.

Philip Totaro: It’s a wind, I think, hybrid, wind, solar and storage hybrid, yeah.

Rosemary Barnes: Yeah, that makes we need, we haven’t had that much utility scale renewables come on in the last few years. I feel like it really feels like announcements have slowed down, especially of things starting.

I know there’s a couple of big wind farms that are just starting to be commissioned now, but we’ve got to get all the way to a hundred percent renewables. We’re only, I think, still in the thirties for Australia as a whole at the moment. We need stuff like this, don’t we? It’s not just utility solar, which I agree that it’s hard to see how we need more solar on its own, because we got so much negatively priced electricity the whole time that solar is generating and there’s a lot of curtailment for utility scale solar at the moment, but this one has wind as well, which is still going okay in terms of its value, cause it generates it a lot more times than just the middle of the day.

And crucially storage. Everything’s got storage associated with it now. I think you can just get way more value out of your project if you have some storage on it. Yeah, no, I think we need this and I’m stoked because it’s very close to my home. I could probably drive out there in an hour.

So yeah, we’ll be very excited if this happens and yeah, better get in touch and see, I’ve noticed on their website that they’re planning to do use the wind farm for education opportunities. So maybe we can partner up on something like that. It would be really nice to have such a huge wind farm.

So close to home. Marc Thiessen.

Allen Hall: I was looking at some data from Mental Store that Phil was sharing about the Australian wind farms and the profitability of a number of the farms, and the ones that are losing money big time. It’s almost three trillion dollars over the lifetimes of the project that they’re going to lose.

And obviously, they’ll be offset by the wind farms that are producing and are, and profitable, but three trillion dollars in losses. Is a lot of money.

Rosemary Barnes: Yeah, I gotta say I was shocked to see those figures as well.

Philip Totaro: Let’s put that in a bit of context as well. The, this is a projection of, based on historical average pricing that comes from the publicly available data through, Australia’s NAM.

Which is a, it’s a data platform for getting access to pricing data and production data and other miscellaneous information about project sites which is obviously helpful to have. But the, what we’re doing is we’re calculating based on, the price being paid for power and the amount of generation they have.

Versus how much CapEx went into the project. We’re trying to calculate how long is it going to take a project to pay back the capital in addition to the operating expenses they’ve got on an annual basis, the land lease payments, and anything else that they have that they pay for annually. Out of the projects that are operating in Australia 62 percent of them are going to, are projecting at this point, based on data through, the last few weeks or months here 62 percent of projects in Australia are going to turn a net positive return on capital.

During the planned lifetime of the project. Okay, so that means that if you designed a project for a 20 year life, you spent, whatever, 500 million Australian on building the thing, it’s gonna pay back that 500 million Australian, plus an extra, whatever, 100 million, 120 million whatever the number is.

Now, 62%, however, is not that great. When you compare to a market like the United States, we have 86 percent of our projects, including projects that are a lot longer lived and a lot longer lifespan, plus a lot older technology. That we’ve leveraged. Keep in mind that most of the, Rosemary, when was the first wind farm in Australia?

I think the first utility scale one was like late 1990s.

Rosemary Barnes: Maybe even early 2000s, actually, like 2001.

Philip Totaro: The reality of that market is that they have, most of their projects are 20 years old or less already, and a significant portion of them are a lot less, than 20 years old, so the fact that, in a market as, that frankly is a little more complicated in terms of, power pricing and distribution like we have in the United States with all our regional ISOs and things like that we’re actually doing a little bit better.

On the asset profitability than a market like Australia is. And look, the bottom line is that plays there’s obviously market dynamics and we can talk about negative pricing in Victoria and South Australia and curtailments and stuff like that. The bottom line is there’s an element of this which asset owners are in control of and that is your Availability and your maintenance practices, which plays into how much you’re spending on an annual basis to keep these things up and running.

And there’s work to be done there.

Allen Hall: If a third of the projects in Australia are losing money, there is something seriously wrong when you compare them to the rest of the world. Is it related to the type of turbines that are being installed? Is it has to do with the amount of solar that has gone in on Australia?

What are the driving, what are the top factors there?

Philip Totaro: A lot of it has to do with the fact that Victoria has the the highest level of wind market penetration in terms of megawatts installed and Victoria is also the market. Or the state within Australia, the overall Australian market where you have the highest amount of curtailments and negative pricing events just because of, the market dynamics, the amount of rooftop solar that they’ve got just a lot of commercial things that go into the power offtake.

Again I’ll turn it over to Rosemary at this point if you want to chime in with, what leads to a lot of the cheap prices that you see in Victoria and partly in South Australia, but that’s a lot of it.

Rosemary Barnes: Yeah. I think, yeah, basically so much rooftop solar is part of the problem because it’s not really planned or controllable very easily.

And so that has led to issues for utility scale solar and you see a lot of curtailment there. And yeah, wind, it doesn’t only generate during the middle of the day, but it often does generate during the middle of the day. So it gets caught up in that as well with the curtailment. And then there’s also issues with coal as well.

One thing that I learned recently, I was working on site up in Queensland and I was arriving on site a little before seven in the morning. And, um, wind farm was cranking and then it just, everything turned off basically at seven in the morning rooftop solar has barely had a chance to, start trickling onto the grid at that point.

You can’t fully blame rooftop solar. It’s also a lot to do with the amount of coal that’s in the system that can only turn down a certain amount. And so when you get these really mild weather periods, like in spring, when this trip was there’s just not much demand. And even all the coal generators turned down as low as they can get is more than enough than then the grid needs when you add in wind as well.

Wind farms are curtailed because. Coal will bid into the market at a negative a thousand dollars at the minimum because it costs them more than that to switch off. So Victoria also still has quite a lot of coal in the grid. So I think that people underestimate that, it’s very easy to just blame renewables for this.

But it’s not, it’s a matter of the whole energy mix, not matching what what demand is rather than being able to pinpoint it on one technology in particular. But there has been some recent developments. One of the coal generators did manage to turn itself off completely in the middle of the day for a few hours and then back on again.

Which has not normally been done. Usually you turn it down to the minimum load, the base load and then, ramp up and down from there slowly. But in this case, they actually managed to turn it fully off. So they are thinking of ways, cause they don’t want to pay negative 1, 000 through the middle of the day to keep on generating, paying like quite a lot for the privilege of staying on.

So coal plants are pretty incentivized to try and, you adapt to the reality of the way that the grid is today.

Joel Saxum: I think that’s why we’re calling it an energy transition, right? It’s, we know that these things, the market dynamics are changing and the power mix is changing. And as we put more renewables on the grid, we have to understand how everything plays together better.

And in the future, as we get more renewables, you’ll see that coal plants will just get decommissioned because they won’t be able to sit and run.

Rosemary Barnes: Yeah. Yeah. And that, that is happening, but I think it will prolong their lifetime if they are able to operate more flexibly. It’s harder. It’s definitely a lot harder.

And I was actually talking with somebody, Recently, who used to work in a coal power plant saying that, they did a lot of work on how much you can turn down coal, but then they didn’t necessarily use it in reality because it’s a lot more work. It ends up with a lot more maintenance, it was never designed to operate that way.

And they’re not like maybe fully confident that the test that they did actually, will ensure safe operation. Thanks Cause it’s, obviously a big deal when you have an unexpected outage from a coal power plant. It’s not when one wind turbine goes offline, that’s, a few megawatts, no big deal.

But if a whole coal power plant trips then if that’s down, needs maintenance for a few weeks, that’s when you see energy crisis when you have a few things like that stucking up. It’s simple to say, oh yeah, they’ve solved this now. There’s been one successful trial, but the fact that.

They’ve done it once is not nearly enough to say, yeah, moving forward. Coal is now a flexible source of generation. It’s definitely, you couldn’t consider it flexible, but yeah, we do see things changing. Do you think that people have been surprised? Is it poor planning for the one third that are not profitable?

Is it things that. Like a more sophisticated developer with more experience might have known to expect in advance. Cause I know that, with the work that I do, a lot of times I come in when people have, much higher maintenance costs than they expected. And when you look at the site and the, the weather a few other, things that might cause more lightning, more leading edge erosion, like often you can say, you know what, if you’ve properly Did you?

Pre site selection, if you did that well, you should have known that you would have these increased maintenance costs in these areas.

Philip Totaro: That’s a great question though, and I’ll actually, I’ll pick up on that. Back in the good old days of 15 years ago We didn’t have the same type of philosophy for wind turbine design that we have today.

Wind turbines were designed in, to fit into a specific IEC wind class, and they were either, 1A, 1B, 2A, 2B, 3A, 3B, and maybe a class S kind of turbine, if you were lucky if an OEM decided to, offer that type of a product for your market. Australia has a lot of and look, the United States was the same way and it’s why we’re seeing a ton of repowering right now, or one reason, obviously we’re much more PTC driven, but there, there are a ton of project sites that had.

The best available turbine sighted at the site, if that makes sense. So yeah, an IEC Class 2A turbine was the ideal turbine for this site, but it probably wasn’t, based on just the fact that was the turbine, the best available turbine. Not necessarily because that was the best possible turbine.

Allen Hall: Yeah, but Phil, why would that matter?

Philip Totaro: It matters only because you’re, it’s the amount of time you spend at full rated. And that, when you’re not at full rated, when you’re on that lower portion or the, ascending portion of the power curve, you’re not quite, Operating at peak efficiency either, when you’re a full rated power, you have more propensity to operate a full peak efficiency, like electrical conversion efficiency too, not just like aero efficiency.

Allen Hall: Sure.

Rosemary Barnes: Wouldn’t this fit into the category of things that people could have known ahead of time? What’s the issue here? Is it that the wind the. Wind distribution is different in Australia than it is in the sites where these turbines were originally developed for or what?

Cause surely people, I know we’re still putting up MetMasks and getting, wind data here. So I’m sure that they’re calculating how much they expect to generate with the power curve for the turbine they’re thinking of buying. Why are they surprised?

Philip Totaro: Yeah, but again, it’s not that they just got like the best available turbine they could get, not necessarily.

They have to buy what’s available. If the OEM doesn’t have a turbine that is site specific designed for that particular Australian wind site, that maybe it operates at a turbulence intensity of, whatever at, 8. 9 meters per second average. But then there’s also seasonality factors that play into that.

And my point is that. They just, they cited whatever the best available turbine they could get their hands on was and that’s what they’re, that, so they’re not necessarily getting the most out of the available wind resource, okay? That’s part of it. The other part is that based on what we talked about before with some of these commercial market dynamics, you have a scenario in Australia where it, if the PPAs are lower, Depending on how the OEM full service agreement is written, they may get a portion of, the upside benefit of the availability of the project site, but it’s also, they have to measure that against how much repair work they actually have to do in the, Capital cost of those repairs as well as the time and labor for the site techs.

Whether they’re doing the work themselves or they’re farming it out to an independent service provider who’s local they have to balance that and that’s also part of what’s contributed to a lot of the OEMs not necessarily fulfilling the full scope of their contractual obligation because they, based on the PPA prices that you’re getting for project sites in Victoria, for example.

You might not be able to do all of the repairs because the annual revenue for the project isn’t what you thought it was going to be. It’s lower than average. And that just eliminates a lot of the budget that you would otherwise spend on doing a bunch of the site repairs that you want to be able to tackle.

Allen Hall: It feels like there has been a shift in the market dynamics because of all the solar that has been added. So if you were installing wind turbines 15 years ago and you had done all your projections. They, the accountants, know what they, in theory, were going to make 15 years ago, today. But there’s been such a huge shift in the energy grid towards solar in Australia.

Doesn’t that really impact your financials as you’re halfway through the project and all of a sudden this decent return turns into a negative really quickly?

Rosemary Barnes: Yeah PPAs are for, right?

Allen Hall: Yeah, but the PPAs aren’t doing it, right? So either they’re getting curtailed or something’s happened, right?

Because they or interest rates have changed so much that they’re no longer profitable because everything else is in cost so much that the PPAs don’t cover it. One or the other.

Philip Totaro: I think that’s part of it. But the other aspect of this is Unlike a market like the United States, where after 10 years, we’ve got the production tax credit incentivizing companies that own and operate renewable energy assets to repower, they have lower average capacity factor in Australia than we do in the United States, just based on, wind resource and wind characteristics.

However, They also, that basically implies that they’re also not running the turbines as hard. So you’re not seeing the amount of mechanical wear and degradation, particularly in the mechanical components. Maybe you’re still getting the amount of lightning strikes that you would in the U. S.

Maybe you’re still getting the amount of leading edge erosion or whatever else. Again I’ll let Rosemary speak to some of that. But the, the reality is you’re just not running those turbines as hard, which opens the door to the refurbishment market and potentially the repowering market.

Allen Hall: But Phil, I go back to the basic fundamentals of this. They estimated what they’re going to make when they started the project. Somewhere it went wrong. And for more than a third of the projects are on that red case of negative returns. Something dramatically has shifted in Australia. I’m not sure what that is.

I doubt it’s wind. I, in terms of the quality of the wind and the power factor, sure, and the capacity factor, sure, and some of the other ones, but that shouldn’t drive it. So it’s gotta be something larger economically.

Rosemary Barnes: Maybe we can request some more data crunching from Phil. We know he’s got the data.

Can we pull apart, like what percentage of their generation is covered by PPAs for the profitable versus non profitable companies? Is it something to do with, the year that they were commissioned? Is it, a time based thing? State by state? Yeah, I think that you’ve mentioned before that.

Queensland projects are more profitable than Victorian projects. A few things like that would be really interesting to, to dig deeper into it, to find out, what these are, because yeah, like Allen says, obviously no one does the sums, decides to invest in, no one does the sums and then decides to invest a project that they expect to lose the money.

It’s gotta be something that came up that they weren’t expecting either because they didn’t have the information or because the circumstances changed. That’s basically the only two options, isn’t it?

Joel Saxum: I’d like to see what the difference in contracts is with the OEMs and the FSAs versus other parts in the world.

It’s not three trillion though, Joel. No, it’s definitely not three trillion. I don’t think it’s three trillion but you go to different places in the world and the uptime guarantees are different percentages, the LDE. Arrangements are different. So maybe there’s a thing in Australia where the LDs and the uptime guarantees aren’t quite as stringent as they are in other places in the world.

And I’m not saying that’s going to make up 38 percent of the market there, but it might make up. Two to five percent of profitability. I don’t know.

Rosemary Barnes: I’ve just got an email actually from a potential speaker at the conference and he’s, he said that one thing he could talk about was some of the bruises that he’s experienced as from development through to seeing those same assets in operation.

And some of the surprises, and one of the things that he mentions is we should be focusing on dollars and gigawatt hours and not gigawatts in time, which is what the contracts are mostly based around in Australia. It’s an availability guarantee that’s time based and that’s something, one of the rants that I frequently have with my clients that, you set an availability guarantee in terms of time and where’s the incentive to make sure that, you’re doing the right, you’re doing your maintenance at a time when it’s going to cost you less, like the wind farms that I worked in.

In Europe and especially in Canada, actually they were so fixated on how much, like the opportunity cost of doing maintenance now versus later, they had a big board up with the, the price of electricity just like firmly up. It just, that was the main thing that you saw when you got to work in the morning, you saw what the wind speeds were, what the farm was generating and, you That was down, you would see the cost of that.

And they would look at the forecast a few days out in advance and decide what to do. What maintenance needed to be done now? What could be, what could wait for a time when prices were expected to be lower? I just don’t see any incentive to be that smart in Australia at the moment. Because you’ve got these full service agreements with time based availability guarantees.

And then the other thing that you see, which is even worse and, like borderline deceptive is the service providers are like we’re going to meet our availability guarantee for this year, so we don’t need to, we don’t need to worry about anything. We can leave. Maintenance on this site and focus on another site where, you know, like where borderline going to meet it or not and have to pay a penalty or even worse.

I’ve seen cases where they’re like, we know we’re not going to meet our availability guarantee this year. Forget about this site. Like it’s lost cause. We’re already going to have to pay that penalty. Focus on somewhere else. And that poor wind farm owner of the, the site that’s already got big enough problems that they can’t meet their availability guarantee.

They’re just getting just hammered because they’ve got a bad contract. I just think that is so on point and not something that people think about when they’re, when they’re signing on the dotted line for the terms of their service agreement. I’m not sure people realize that they differ in the, types of agreements that you could get, and it makes a huge difference to your ongoing profitability.

Joel Saxum: I think that’s why, that’s one of the reasons why that, when we started putting the event agenda together for that, for our Wind Australia conferences. That was one of the panels that popped up is as an asset owner, how do you deal with the OEMs on this stuff? And if you’re bound by a contract now, maybe the next one you sign can be a bit better.

Allen Hall: And you should look into attending the Wind Energy O& M event in Melbourne, Australia on February 11th and 12th, because we’re going to be talking about this subject, the profitability of Australian wind farms and what you can do about it. But also hearing from a number of industry experts, you get to network with everybody in Melbourne and learn about some of the innovations that are going on all around the world.

It’s going to be a good conference. So you don’t want to miss this opportunity to optimize your wind farm. And drive down some of the costs. You need to go visit www. windaustralia. com or you can just send something in the post to Rosemary and she’ll register you.

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Allen Hall: Down in New Zealand, offshore wind developer Blue Float Energy has withdrawn from New Zealand following concerns about conflicting seabed use with the proposed mining project included in the government’s fast track approvals bill. The trans Tasman resources plans to mine some vanadium rich areas on the bottom of the ocean.

And the Blue Float Energy was really concerned about that and said, hey, we can’t do offshore wind and mine the seafloor at the same time. Now that has a big impact on jobs because that Blue Float Energy project was supposed to have created up to like 12, 000 jobs total. That’s pretty cool. It’s a big deal.

I’m wondering, what are some of the key things here, guys? What is driving this decision and are we gonna start seeing this happen off some of the coastlines of the United States where they do drilling for oil and all kinds of other things?

Joel Saxum: I think simultaneously, simultaneous operations are a part of any land use program, right?

You don’t see You know, when you go to Midland, Texas, where there’s the most oil wells, you can stand on one of them with a handful of baseballs and hit 20 other ones. There’s also, that’s true. There’s also fiber optic in the ground and cable in the ground and water wells being drilled and salt brine disposals being made.

And so you can use land for multiple things. You can put offshore wind in and you can still fish. You can do a lot of things. You can put oil and gas and pipelines all over the Gulf coast of the U. S. And you can still put offshore wind in there. The, so I’ve been following offshore or deep water subsea mining for quite a few years now because it’s very interesting to me in my past life, we created tools for that, the testing and exploration of that environment.

Most of, most offshore deep sea mining is happening now in extreme depths. I’m talking, you’re talking three and four to 5, 000 meters of water. That’s where most of it’s happening because that’s where most of the resources are. For whatever reason that’s where they reside. There, a lot of them are like there’s cobalt, manganite and all kinds of good stuff molybdenum all in like little potato sized chunks, just all across the floor.

So where you’re putting or where these wind farms are going to, are slated to go is in shallow or much shallower water than you see most subsea mining. So it’s not, that’s not going to be a normal thing where we are or where most floating offshore wind is going to go. Another thing to think about is the actual operation that it entails.

So the actual operation that subsea mining entails is imagine you put a ship out in the water and you basically hook a big vacuum hose to it. And on the bottom of the seafloor, you put a vehicle that some of them are the size of a truck, some of them are the size of a house and they have tracks on them and they just vacuum up the sub, the seafloor and then deposit the sediment right back onto the seafloor.

Lot most of the studying has been going on around how long will those sediment plumes last and how long will they settle out? So once you’ve gone through that area once you don’t need to go back because you’ve vacuumed up everything And the sediment resettles you do geotechnical and you can put anchors in that stuff Just like you could put it in anything else so I can see a pause here or something But to me this looks like political posturing rather than a technical problem.

Philip Totaro: Yeah. And I will potentially concur with that based on a couple of things. One is the lack of maturity of the market and the level of communication that the government has had during this whole fast track process that they’ve supposedly put in place to get a number of renewable energy projects, including the one proposed by Blue Float to.

It’s a come to fruition there. There’s a lot of challenges in a market as limited is as New Zealand would be. You’re only going to build maybe three or four major offshore wind farms there, and you could power both North and South islands and probably still have a surplus. The reality of it is, yeah, That, markets like New Zealand also, similarly, we just saw this week or last week as we’re recording that Columbia just announced that they have nine different companies participating in a potential auction for their offshore lease rights.

The challenge with that, markets like, whether it’s Columbia, whether it’s New Zealand. Getting a little bit ahead of themselves because they don’t even have what they need in place for the infrastructure. Again, going back to Columbia, I went down there in 2018 to see what that onshore and offshore wind market potential was going to look like.

Great wind resource. Same thing in New Zealand. Great wind resource. Don’t have the port infrastructure to be able to handle offshore wind. The port in Cartagena needs to be dredged. They don’t have the electrical off take infrastructure built yet. Again, similarly in New Zealand, they’d have to lay a whole new bunch of power lines.

And get a lot of infrastructure built. before you’re really ready to do, offshore, meaningful offshore project development. So the fact that, these companies are getting excited about these far flung frontier markets it’s great and everything, but I don’t think that this, I think Blue Float is saying, you know what, this is probably just too immature of a market.

At this point, they’re using this concern as more of an excuse to say, all right, we’re just gonna, pull back from New Zealand for the time being while we see the market evolve and come to fruition and at which point we’ll be back. And in the meantime, we’re gonna go investigate, other opportunities, including, by the way, Blue Float was one of the companies that ended up tendering in, to, or at least qualifying to tender for the market auction in Columbia.

Allen Hall: Is floating wind really suffering right now with, especially with the offshore auction off the coast of Maine and Massachusetts, only garnering about 20 million in, in, in Having two companies submit, essentially was the minimum bid of roughly 50 per, what, acre? Something like that. Those prices are really low Phil, so even in New Zealand where it can probably make an argument for having Wind turbines there offshore.

Even in Maine we’re having trouble getting floating going. And plus the DOE cancelled the, or didn’t fund, the port infrastructure where you could do floating wind off at Sears Island.

Philip Totaro: They gave the money to Virginia instead. So that’s, there’s, a story behind that, which we’ll maybe get into later, but.

Allen Hall: But that’s fixed bottom. That’s not floating, Phil.

Philip Totaro: Yeah. But you’ve got a market in us, in New Zealand where you could actually justify the cost of an offshore wind PPA compared to what they pay for some of their onshore power generation facilities, because again, they’ve obviously got to import coal, or they don’t have a lot of gas down there, they have, I guess they have a little bit but not tons so they necessarily have to, rely on renewable resources and they haven’t built out a significant amount of solar in New Zealand yet, they have a few renewable offshore wind farms, it’s less than a gigawatt at this point, although they are building two new ones at this at this juncture, so You know, the reality is that, there is a potential for offshore wind in a market like New Zealand, but it’s going to be finite, as I mentioned.

They’re, you’re not going to see, like 190 gigawatts, like is being proposed in Brazil right now, for example, or I think it’s something like 85 gigawatts or something proposed in South Korea at this point where, they have. The potential to exploit their infrastructure and they have load centers that are gonna be able to take that create that demand and take that power.

I don’t know where, besides, Wellington and Auckland and some of the other major cities. I’m not really sure where they would even put, power from a multi gigawatt project, floating offshore wind project, which is the kind of scale you have to build at if you’re going to do floating wind commercially viable.

So that’s your challenge.

Joel Saxum: Rosemary, correct me if I’m wrong, but is Wellington the most windy city in the world?

Rosemary Barnes: Windiest capital city in the world.

Joel Saxum: The windiest capital city in the world. So the resource is there for sure. It’s a big caveat though.

Philip Totaro: Capital city.

Allen Hall: Come on.

Philip Totaro: Compared to what? That this is the same scenario, by the way, that happens in the Gulf of Mexico where you’ve got onshore wind and solar in earcot that’s dirt cheap.

Why am I building offshore wind particularly expensively? I’m not really, it just doesn’t make sense to be able to do that, why not leverage the natural resource that they’ve got to be able to build cheap onshore wind and solar and exploit that natural resource when, if they’re gonna, again, I, Joel’s right you don’t necessarily have overlapping use of that same area where they’d be putting the moorings for floating that would necessarily, because you’re not going to put, you’re not going to put something that’s floating in, 3, 000 or 4, 000 meter depth, because at the end of the day you still have to tether it, so you don’t want moorings that long.

You might be willing to put moorings in a thousand meter depth preferably shallower, but, even that’s pushing it. Which is what, by the way, we’re doing, we’re going to be doing in California, is most of the project sites out here are going to be about a thousand meter water depth, so You know it just limits the amount of commercial viability for some of these sites.

Allen Hall: Here’s what I think. I think the OEMs are not offering a lot of offshore wind. I think it really comes down to that. I think if, unless the Chinese are going to step into offshore, and they probably, they may, they clearly can. The Western OEMs are not going to be super interested in doing offshore wind, based on what’s happening with GE at the moment, and Siemens at the moment, and a little bit of Estes.

Getting projects off the ground depends upon them. And if you can’t get an OEM to play along, and you don’t have a floating platform design that’s universal across the world, so you’re going to end up spending a bunch of money designing these things. It makes the project way too expensive. And so I can see everybody backing out at the minute, which explains what’s happening worldwide simultaneously.

And it’s not just one project. It, there are most of them, the majority at this point. Are we considering or delaying or stopping? That tells you something about the market conditions. That maybe floating wind is not ready for prime time.

Philip Totaro: Not in every market. What market is it? Europe and potentially North America, but

Allen Hall: France has a lot of land, guys.

You could plant some wind turbines on

Joel Saxum: France with that much problem. The French aren’t happy with wind. I think at some level why people want to move offshore for things is just because of pushback onshore. I agree. And are you willing to pay for that? No, the French don’t like even okay, so take New Zealand.

I spent, I’m not an expert. Rosemary, of course, knows a lot more about the people down there, but I spent about a month down there last spring or two springs ago. And what I found is traveling around talking with a lot of people is that it’s like the Midwest. A lot of the people I talk to, they’re not were very much it was like having the technical versus political conversations about wind, about guns, about all kinds of things that was mirrored what the same conversations you would have in Minnesota, Iowa, Kansas, whatever.

I was having the exact same ones over there with people that sounded, besides the accent, like they could have been my neighbors where I grew up. So I think that they’re, they had I was at one point in time, I was in the Marlborough region in the wine country there. And the, even some of the winemakers were pissed off about just south of them as a few wind farms in the hills.

And they’re like, those dang wind, they didn’t like it. They didn’t want anything to do with it. And I know New Zealanders, they’re, and they, Yeah, and they’re very much about their natural re throw, the natural beauty of the place, which if you’ve ever been there, it is wild. It’s amazing. Everywhere you turn, it’s beautiful.

So they, and they have this thing about we don’t want that messing up our landscape, blah, blah, blah, blah, blah, these, this, that, and the other thing. So I think in some places, people just go want to go offshore because it’s their only choice geographically and politically, right? Like on the East coast, we have the same problem.

Rosemary Barnes: I don’t know what their specific feelings about wind energy is, close to them. I know that historically New Zealanders have been a little bit funny about any kind of energy generation. They pretty much will be anti, if you just tell them, are pro coal power? No. Pro nuclear? Hell no.

Are you pro hydro? Ah, not anymore. No. Like every single one, it’s a no, but yet they do having access to electricity. And yeah, like I’m sure there are plenty of people who are anti wind energy, but you have to make some compromises. If you want to have access to electricity, you have to generate it somehow.

You can’t just rule out every single energy generation technology one after the other.

Allen Hall: That’s going to do it for this week’s Uptime Wind Energy Podcast. Thanks for listening. Please give us a 5 star rating on your podcast platform and subscribe in the show notes below to Uptime Tech News, our weekly newsletter, now on Substack.

And check out Rosie’s YouTube channel, Engineering with Rosie. And we’ll see you here next week on the Uptime Wind Energy Podcast.