Australia’s first and potentially largest offshore wind project is getting a $19.5 million funding boost from the Victorian Government, which is good news for service vessel operator TEK-Ocean Group (ASX: T3K).
The integrated services provider is involved in the $12 billion Star of the South project, which proposes to build a wind farm with up to 2.2 gigawatts of capacity off Victoria’s south coast. This capacity is expected to provide almost 20% of the state’s annual energy needs.
This week the Victorian Government announced its pledge to provide $19.5 million to Star of the South to support pre-construction development activities as part of a total $40 million funding round to kick start three major offshore wind projects.
The state will also support Macquarie Group’s proposed 1GW farm off the Bass Coast with $16.1 million in public funding, while Scotland-based Flotation Energy will receive $2.3 million for scoping studies and surveys for a 1.5GW wind farm off Ninety Mile Beach in the Gippsland region.
In September, the Australian Federal Government introduced Australia’s first offshore electricity legislation to establish a regulatory framework for the offshore wind industry.
This week’s announcement comes as a final vote on legislation to enable offshore wind projects in Commonwealth waters is expected in the Senate during the final sitting days of federal parliament this year.
Star of the South project
The Star of the South project involves the construction and installation of wind turbines in Victoria’s offshore Gippsland Basin and a transmission network of cables and substations connecting the wind farm to an onshore grid connection point at Latrobe Valley.
The project is owned by Australian founders of the same name and is backed by global green energy fund Copenhagen Infrastructure Partners.
The pre-construction work that the $19.5 million in public funding is expected to cover includes site investigations in Gippsland and offshore geotechnical work.
Star of the South chief executive officer Casper Frost Thorhauge described the funding as a partnership (with its share in the investment being $23.6 million), which is expected to bring benefits for both the government and community through knowledge-sharing.
“If Star of the South is approved and proceeds to construction, the project could start construction as early as 2025 with full power toward the end of the decade,” he said.
TEK-Ocean as the preferred contractor
The Victorian Government’s funding boost provides additional confidence to TEK-Ocean that the Star of the South project will come to fruition.
In 2019, TEK-Ocean became the first Australian company to be contracted for feasibility associated activities for the proposed large-scale project.
The company said it expects its role to grow as a preferred tender and claims its newly upgraded TEK-Ocean Spirit is the only vessel capable of doing much of the offshore work.
According to the company, the wind turbines proposed for Star of the South are three times bigger than onshore turbines and it expects to be working on the project for the next 10 years.