Wind energy playing a crucial role in the energy transition

Australia’s wind energy sector has been evolving rapidly, with both onshore and offshore projects playing a crucial role in the country’s transition towards a cleaner energy mix. With strong government ambitions, increasing investments, and world-class wind resources, wind power is set to become a cornerstone of Australia’s renewable energy strategy. However, upcoming elections and policy developments will significantly influence the pace and scale of this transition.

Installed capacity and growth

• Total capacity: As of 2023, Australia’s total wind energy capacity reached 11.5 GW, making it a regional leader in wind power. The vast majority of this capacity comes from onshore wind projects, which have been developed primarily in states such as South Australia, Victoria, and New South Wales. The growth in wind energy reflects Australia’s increasing commitment to renewable energy and its efforts to phase out fossil fuels.
• Onshore wind: Onshore wind remains the largest contributor to Australia’s wind capacity. Major projects like the Murray Link Wind Farm and the Boco Rock Wind Farm have significantly increased Australia’s wind power generation, with more projects in development. Given the country’s vast land availability and favorable wind conditions, onshore wind is expected to continue expanding, especially as it remains a more cost-effective option compared to offshore wind.
• Offshore wind: Offshore wind is a growing focus in Australia, although still in its early stages compared to onshore wind. As of 2023, Australia had no operational offshore wind farms, but 27 GW of offshore wind projects have already reached the feasibility stage. The Star of the South Offshore Wind Farm, planned off the coast of Victoria, is the largest proposed offshore wind farm, with a capacity of 2.2 GW, expected to be operational by the late 2020s.

  Australia has theoretical offshore wind potential of over 5,000 GW, with some regions, particularly in the south, experiencing capacity factors of up to 80%. The government has identified six key offshore wind development areas, including Gippsland (Victoria), the Hunter region (New South Wales), and the Bunbury region (Western Australia), which present opportunities for both fixed-bottom and floating wind technologies.

Government ambitions

• 2030 target: The Australian government has set a target of 82% renewable electricity generation by 2030, with wind energy playing a critical role. This includes both onshore and offshore projects, supported by government policies aimed at expanding large-scale renewable energy capacity.
• 2050 target: Australia has committed to net-zero emissions by 2050, with wind energy expected to be a central pillar of this transition. Offshore wind, in particular, is seen as a key component in decarbonizing the electricity sector and reducing reliance on fossil fuels. States like Victoria and Western Australia are taking the lead in offshore wind development, aiming to integrate this energy source into their broader sustainability strategies.

Impact of upcoming elections on wind energy

The upcoming federal elections will significantly impact the future of wind energy in Australia. Different political parties have contrasting approaches to renewable energy policies, which could either accelerate or slow down the growth of wind power.

• Labor Party’s Stance: The Labor government, under Prime Minister Anthony Albanese, has been a strong proponent of renewable energy, emphasizing investment in wind energy infrastructure, regulatory support for offshore wind, and increased renewable energy targets.

• Coalition’s Position: The Liberal-National Coalition has been more cautious, focusing on energy security and a slower transition from fossil fuels. While they support some wind energy projects, they emphasize a more gradual shift towards renewables, which could impact offshore wind development.

Current and upcoming projects

• Murray Link Wind Farm (Onshore, South Australia) – A 200 MW project that began operations in 2023, strengthening Australia’s onshore wind capacity.

• Star of the South Offshore Wind Farm (Victoria) – With a potential capacity of 2.2 GW, this will be Australia’s first large-scale offshore wind farm, providing clean energy to over 1.2 million homes.

• Boco Rock Wind Farm Expansion (Onshore, New South Wales) – The existing 113 MW wind farm is undergoing expansion, expected to add 100 MW of new capacity.

• Gippsland Offshore Wind (Victoria) – One of Australia’s most advanced offshore wind zones, with 12 feasibility licenses granted.

• Hunter Offshore Wind (New South Wales) – A proposed floating wind farm in deep waters, though facing cost challenges.

• Bunbury Offshore Wind (Western Australia) – A promising 11.4 GW offshore wind development area, open for feasibility applications.

Recent developments

Government support for wind energy

The current administration has introduced several initiatives to support wind energy growth, including:

• The Renewable Energy Target (RET), which mandates increased renewable energy production.

• Funding for electricity grid upgrades to integrate more wind power.

• A streamlined permitting process for offshore wind projects, accelerating development in the sector.

State-level initiatives

Some Australian states are taking the lead in wind energy expansion:

• Victoria has committed to 9 GW of offshore wind capacity by 2040, positioning itself as a leader in offshore wind.

• New South Wales and South Australia continue to expand their onshore wind portfolios, capitalizing on strong wind conditions.

Technological Advancements

• Floating wind technology is being explored to harness wind resources in deeper waters where fixed-bottom turbines are not feasible.

• Australian wind turbine manufacturers are collaborating with international partners to enhance turbine efficiency and reduce costs.

Challenges facing the wind sector

Despite significant progress, Australia’s wind energy sector faces several challenges:

• Competition with onshore wind: Offshore wind remains more expensive, with onshore wind being the more cost-effective option.

• Regulatory uncertainties: The Offshore Electricity Infrastructure Act 2021 (OEI Act) is still being refined, with gaps in financial security, grid connections, and revenue support mechanisms.

• Supply chain limitations: Australia lacks specialized offshore wind infrastructure, ports, and vessels, leading to high reliance on international expertise.

• Community opposition: Some offshore wind projects, like those in Portland, Victoria, have faced local resistance, leading to development area reductions.

Australia’s wind energy sector is set for strong growth, driven by both onshore and offshore projects. The outcome of the upcoming elections will play a pivotal role in shaping the future of wind energy, with the Labor Party favoring aggressive renewable energy expansion and the Coalition adopting a more cautious approach.

Regardless of political developments, wind energy is essential for meeting Australia’s renewable energy targets and achieving net-zero emissions by 2050. With world-class wind resources, increasing government support, and a growing pipeline of projects, Australia is well-positioned to expand its wind energy capacity and play a significant role in the global clean energy transition.

This information is updated in March 2025

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