Renewable energy specialist Copenhagen Offshore Partners (COP) is casting its net wider than South Taranaki to include the Waikato coast to assess the area’s potential for offshore wind power generation.
COP, the development arm of Copenhagen Infrastructure Partners (CIP), joined forces with NZ Super to form the Taranaki Offshore Partnership in March last year to look into prospects for offshore wind power generation in New Zealand.
Giacomo Caleffi, a senior business development manager at COP based in Wellington, said a final investment decision on whether an offshore wind farm will go ahead is due by the end of the decade.
The joint venture looked first at South Taranaki, but the proximity of the Waikato coast to the national grid is making it look attractive, he said.
In March last year, the partners announced they had formed a partnership to explore the potential for large-scale offshore wind energy in the South Taranaki Bight.
Subject to feasibility, an initial planned one-gigawatt (GW) development would represent more than 11 per cent of New Zealand’s current electricity demand capacity and could power over 650,000 homes.
“The site that we started with was South Taranaki, and we are now starting to look at Waikato, which is the second-most-obvious place for offshore wind in New Zealand,” he told the Herald.
“South Taranaki has absolutely perfect wind conditions, and a shallow seabed allows you to install turbines,” Caleffi said.
“It’s not so good for the transmission grid, I guess. A big upgrade would be required in South Taranaki, whereas Waikato is the flip side.
“There is a very strong grid connection at Glenbrook and a Huntly as well, and it’s much closer to the load centre of Auckland.”
Caleffi said the project was still very much at the feasibility stage.
If it goes ahead, the turbines will be 20 km-plus offshore.
Depending on the exact final location of the windfarm, the turbines would sometimes be visible from the coast.
Visibility of the turbines would be affected by weather conditions.
Regulations are still being formed as to how the sector will develop.
The overseas experience has seen regulations loosely follow the permit system that applies to offshore oil and gas exploration.
“The regulatory environment is a big one because we need to understand what the rules of the game are,” Caleffi said.
New projects need to connect with the backbone of Transpower’s transmission grid.
“We are very happy that Transpower is engaging a lot more seriously around offshore wind.
“They understand that they have a very big role to play in enabling this type of project.
Transpower is running scenarios as to what it will look like from a grid perspective if offshore wind becomes a reality.
“They are starting to paint a map as to where the upgrades will be required,” he said.
The potential for offshore wind power was first highlighted in research conducted by Canterbury University’s Dr Ian Mason in 2017.
Since then, offshore wind has been on the radar screen for global developers.
However, Caleffi said there was a “fair amount” of scepticism as to whether offshore wind will be the right technology for New Zealand as it pushes towards its target of decarbonising by 2050.
“We think it is, given the likely level of future demand and the high level of electrification that will be required.
“That’s the story that we have seen in many other countries, and that’s where offshore wind normally plays a role.”
The Ministry of Business, Innovation and Employment (MBIE) released a discussion document covering feasibility last year.
Submissions closed in April.
“We are very happy that they seem to have listened to the suggestion that for the first overseas wind farms, it would make sense for that process to be developer-led,” Caleffi said.
In August, MBIE released a second discussion document covering commercial permitting.
Conversations about offshore wind often go hand-in-hand with talk about liquid hydrogen, which requires vast amounts of electricity to make.
“From an increased demand perspective, it’s a very interesting avenue and one that could involve the offshore wind,” he said.
He says onshore wind solutions were “very unlikely” to be able to the amount of power required for hydrogen production.
“It’s interesting. It’s a technology that requires more work, but we are definitely keeping an eye open.
“It will be interesting to consider the opportunity of having a hydrogen plant in South Taranaki at the landing of the cables to use as a buffer for the transmission grid.”
Caleffi, who has a background as a structural engineer, has worked on offshore wind projects around the world.
Up until recently, the trend has been one of falling costs for wind turbines.
However, Covid-19 and the war in Ukraine have reversed the trend of lower costs for wind turbines.
“Like every other manufacturing supply chain, it has been hit hard, so we hear of turbine costs now rising by 40 per cent [more] than a few years ago.
In Europe, that’s meant some new projects are struggling to go ahead.
In the renewables world, solar power is gaining ground - particularly in the United States due to its euphemistically named Inflation Reduction Act, which offers financial incentives for green generation projects.
While solar is growing, it comes with baggage. Solar projects often have batteries attached to store power during the night.
“Offshore wind is different from those onshore renewables, mostly because of the scale.
“And it’s the scale of production from offshore wind that people don’t quite grasp.
“Technically, wind is a lot more efficient at sea, where it blows more consistently.
“You rarely have downtime, and in general, it allows you to extract more energy from the resource.”
The reliability of offshore wind means that it can offer quasi-baseload, or continuous, power, while onshore wind is a lot less reliable.
Data taken from Taranaki oil and gas platforms over the last 20 years shows wind blows at a rate of at least three metres per second - enough to turn a turbine - 87 per cent of the time.
“It’s an exciting opportunity for New Zealand, and we see a future where a lot of electricity generation will be required.
“It makes sense to look at new technologies that can bring about those gigawatts in one place.”
CIP is the world’s largest dedicated fund manager within greenfield renewable energy investments and a global leader in offshore wind.The COP/NZ Super joint venture is one of a handful of players interested in wind power in the region.
BlueFloat Energy, a Spanish company, is sizing up its prospects. The wind energy developer is owned by US green energy investor 547 Energy.
Australia’s Oceanex Energy is also in the early stages of development of up to three projects off the New Zealand coast.
Belgium’s Parkwind also has offshore wind ambitions for Australia and New Zealand.
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
The 19 Waikato projects are spread across infrastructure, energy, housing and mining.