Interview with Paul Culliver, ABC Newcastle

PAUL CULLIVER: So, the company called Novocastrian Wind, it was made up of OceanX and Equinor working together. They had been offered a feasibility licence to explore offshore wind off the coast of Newcastle and Port Stephens. They've decided not to accept that feasibility licence, however, OceanX saying they were into it. Equinor, not so much. What's gone wrong here? Chris Bowen is the Minister for Climate and Energy. 

Good morning to you, Minister.

CHRIS BOWEN: Good morning to you, Paul.

PAUL CULLIVER: Why doesn't it stack up?

CHRIS BOWEN: Well, as you said, there's - Novocastrian is a joint venture between an Australian company, OceanX, and an international company, Equinor, Norwegian, and they don't agree. OceanX is all set to go rearing, you know, very keen.

And I do want to pay tribute to their Chief Executive, Andy Evans, who's done a really great job of being very passionate about the Hunter. But Equinor is withdrawing from renewables investment around the world at the moment, which, I will be very frank with you, I find very disappointing. They've withdrawn from projects in Vietnam, Portugal and Spain. They've cut their renewables budget from 10 billion to 5 billion and we're caught up in that, so that's disappointing.

And also, offshore wind is facing some global international investment headwinds right at the moment, partly driven by some uncertainty out of the United States. So, we are caught up in that. So, that's very disappointing. But we are now moving to a research and development stage because I think the Hunter will continue to be very, very important, of course, for our renewable energy future, but also our offshore wind future. It's going to be a bit slower and harder than we hoped.

PAUL CULLIVER: Right. Does this not provide the opportunity for OceanX to do it alone or for another proponent to come in?

CHRIS BOWEN: They're too small. They're a great company, but they are too small to undertake such a big project alone. They don't have the access to the capital. They are experts in their field. They would be the first to say this is too big just for them. They need a partner and frankly, an international partner, given there's no offshore wind being built in Australia yet, it is quite common around the world, and so they're not able to proceed without that partner. But their interest and hopes for the Hunter is undiminished.

PAUL CULLIVER: But in terms of another proponent, someone bigger, that could partner with OceanX or someone else entirely to come in, is that now an option?

CHRIS BOWEN: Well, they’ve tried that. They've tried that. And at the moment, as I said, there are some international headwinds around offshore investment at the moment. So that's why, in my judgement, it's best now to move to a research and development licence because there is still a lot of interest in the Hunter and people still think it can work.

But as I said, it's going to be slower and harder. But we don't want to lose the opportunity to keep that work underway, whether it be, you know, the University of Newcastle, OceanX, others in partnership. I don't want to get in front of what applications I receive, but I do expect that it'll be interest in keeping the work going as we wait for the international market to settle down.

PAUL CULLIVER: Understood. All right, so it's not dead and buried that we could have offshore wind in the Hunter into the future. Explain to me what that licence is about, research and development. Why does that even have to be granted and what does that allow?

CHRIS BOWEN: Well, basically it's one of the names on the tin. It's a licence to go out there and do further checking and research and pilot projects. And again, I don't want to preempt what applications I receive because I don't know what they'll be. It's about offshore wind and other renewables in the zone. There's a great opportunity out there, a lot of jobs to be created for the Hunter.

The Hunter, you know, really needs those jobs into the future, is my view. I'm determined to keep working with people like Sharon Claydon, who's been very passionate about this as well, to make those jobs a reality.

PAUL CULLIVER: What kind of timeline might we think then, if we have to slow this down and do more research? Are we 10, 20 years away from ever seeing something happen?

CHRIS BOWEN: This was never, as I've said to you before, Paul, on your show and others, this was never going to be this week, this month, this year proposition. This was always about theb2030s and I think that remains the case.

Maybe a bit later in the 2030s than we originally envisaged, but this is a long term project. This is not about our 2030 targets. We're not including anything from offshore wind in our 2030 targets, for example.

This is about ensuring that we have the energy going forward for our growing electricity needs, whether it be for AI data centres or for heavy industry. And you know, we're going to need more electricity in the future. It's about creating jobs for the Hunter. As I've said before, these offshore wind farms are jobs rich and energy rich.

You know, there's lots of jobs for the Hunter in this. That's one of the reasons I was, you know, keen on it, remain keen on it, but there is more work to do. It's going to be harder and slower than we hoped in the Hunter.

PAUL CULLIVER: Given those economic headwinds then, would the Federal Government want to kick in more subsidies to get this over the line in the future?

CHRIS BOWEN: Well, we weren't proposing any subsidies for this in the first place and that's perhaps that's, you know, that's, that's been lost in the debate a little bit. This is a private sector proposal. Recently I released the Future Market Design Panel. I don't want to sort of nerd out on our listeners, but that's got some ideas about how we can support renewable energy generation right in the future.

That's been very well received by the sector broadly by, you know, all the energy companies, developers, experts. So, I'm very pleased about that. But you know that is a myth to suggest that this was going to be one that was supported by renewable energy subsidies in the first place.

PAUL CULLIVER: Right. Does that mean offshore wind around the country is just a non-starter right now

CHRIS BOWEN: No, no. We have six zones, the Hunter is one. The Gippsland remains strong. The Southern Ocean zone is proceeding with their developer. I'll be making further announcements about the other two zones; Bass Strait and Western Australia quite soon. The Illawarra is in a sort of different but similar situation to the Hunter in terms of some setbacks but, you know, there is still strong interest in offshore wind in Australia, wer're the world's largest island.

As I said, it's common around the world. We haven't done it. It is jobs rich and energy rich. There's a lot of. Because it's windier and more constantly windy offshore and it's windy at times when it's not onshore can be a very important part of the mix for the energy grid going forward.

PAUL CULLIVER: Why would a developer want to continue to progress plans in a different zone but not have any interest in the Hunter?

CHRIS BOWEN: Well, you've got different companies involved and different challenges. Some of the other zones are fixed which is a more fixed turbines not floating so it's shallower water. That's a more understood and more common technology around the world and a cheaper technology. So, you know, that's one of the unique challenges of the Hunter.

PAUL CULLIVER: Alright, do you ever abandon this entirely if there's just no takers, nobody actually wants to pursue this at some point. Do you deregister the zone?

CHRIS BOWEN: That's not my intention. I won't be doing that. I think it's got potential. As I said, you know this is a longer-term proposition for the Hunter. Sometimes politicians get criticised of only thinking about tomorrow. That's not a criticism that I would accept because I'm thinking about the 2030s and how the Hunter gets its energy needs and its job needs then. And I'll continue to work on that with people like Andy Evans, people like Sharon Claydon, the other MPs because I think there's a lot of potential there.

But we'll also take the community with us. I know this has been controversial in some parts. There's been some genuine concerns that we've worked through and listened. There's been some disinformation out there as well from groups, you know, which I counter and push back on. And we'll just keep working with people of good faith for the best interest of the Hunter.

PAUL CULLIVER: All right, Minister, I appreciate your time today. 

CHRIS BOWEN: Nice to chat, Paul.