Stand at the Bald Hill lookout on Lawrence Hargrave Drive, above the Sea Cliff Bridge at Coalcliff, and on a clear day you can see the container ships queued off Port Kembla waiting for a berth. That queue is a decent visual metaphor for the Illawarra offshore wind zone right now. Plenty of interest sitting offshore, not much of it actually tied up.
The zone that got redrawn
The federal government declared the Illawarra zone under the Offshore Electricity Infrastructure Act 2021 back in early 2024, and it landed noticeably smaller and further out than the area first put to consultation. The original proposal ran closer to shore, in places within about 10 kilometres of the coast between Wollongong and Kiama. What got declared sits further out, generally in the 20 to 30 kilometre band, running roughly from north of Wollongong down toward Gerringong and Gerroa. The total footprint is a fraction over 1,000 square kilometres, down from the bigger area first floated.
That shift wasn’t cosmetic. The Department of Climate Change, Energy, the Environment and Water made the change after submissions flagged visual amenity from the escarpment and the beaches, known humpback whale migration corridors that run close to this stretch of coast between roughly June and November, and conflicts with existing fishing grounds worked out of Port Kembla and further south. Pushing the array line further offshore and shrinking the box was the department’s answer to most of that in one move. Whether it actually satisfies the people who raised it is a different question, and the answer locally still looks like no.
What BlueFloat actually holds
BlueFloat Energy, working with Energy Estate, is the name most people attach to this zone, and it holds one of the feasibility licences issued for the area under its Illawarra Offshore Wind project. A feasibility licence is not a permit to build anything. It buys the holder time, up to seven years under the Act, to do the metocean surveys, the geotechnical work, the bird and marine mammal studies, and the grid studies that would eventually underpin an actual development application. BlueFloat’s own project materials have talked about capacity in the vicinity of 1,000 to 2,000 megawatts for the site, floating turbines given water depths out here run well past what fixed-bottom monopiles can handle economically. Oceanex Energy holds a separate feasibility licence in the same zone for what it calls the Wollongong Offshore Wind project, in a similar capacity range.
None of that is a turbine count you should bank on. Floating offshore wind, unlike fixed-bottom, has no commercial-scale project operating anywhere in Australia and only a handful of small pilot arrays running globally. I’d treat any megawatt figure attached to a floating project this early as an ambition statement, not a spec sheet. The gap between a feasibility licence and a final investment decision on a floating array, in a zone this deep and this exposed to the East Australian Current, is not a small one.
Grid connection: the part that isn’t solved
This is where I get sceptical, and it’s the same test I’d apply to any offshore project before I take the capacity numbers seriously. Where does the power actually go once it comes ashore? The Illawarra coast has existing heavy-industry connection infrastructure around Port Kembla and the Tallawarra site, and there’s an obvious logic in eventually using capacity freed up as coal plants retire. But logic isn’t a connection agreement. Unlike the REZ work AEMO has done for onshore zones further west, there’s no equivalent detailed transmission build already under construction for this specific offshore zone. AEMO’s Integrated System Plan treats NSW offshore wind as a contributor to the state’s longer-term generation mix, but the actual augmentation work, the onshore cable corridor, the substation upgrades, is still a study exercise rather than dirt being moved. I’ve made this same point about the grid test for onshore projects and it applies twice as hard offshore, where the cable run is longer and the landing point has to survive an environmental approval of its own. Readers who want the general version of that argument should look at how the connection question plays out for onshore wind versus offshore wind more broadly.
The comparison with Gippsland is instructive too. Victoria’s offshore effort has had more transmission planning attention put on it, partly because the state government’s own revived SEC has skin in the game there. The Illawarra zone doesn’t have an equivalent state-backed anchor tenant pushing the connection question along, which is one more reason I wouldn’t get ahead of myself on timelines here.
The local opposition isn’t generic
Every offshore wind zone in Australia has drawn objection. The Illawarra pushback has some specific local texture worth naming rather than waving at. Commercial fishers working out of Port Kembla and further south around Ulladulla have raised concerns about exclusion from established grounds. Recreational fishing and dive charter operators around Kiama and Shellharbour have made similar submissions. Tourism operators along the escarpment, from Austinmer down to Gerringong, argue the turbines will sit inside sightlines that are part of what people drive the Grand Pacific Drive to see in the first place. And there’s a whale watching industry out of Wollongong and Kiama that runs specifically off the migration corridor the department says it moved the zone to avoid; whether 20-odd kilometres is far enough is contested by the same operators who make a living pointing binoculars at that exact stretch of ocean.
There’s also a defence dimension that doesn’t get as much column space as the whales. HMAS Albatross at Nowra, not far south of the zone, runs naval aviation training and exercise areas that have historically factored into offshore approvals elsewhere on the east coast, the Hunter zone process ran into similar Defence input near Newcastle and Williamtown. It hasn’t killed the Illawarra proposals, but it’s another agency with a seat at the table before anything gets built, and another reason the feasibility phase runs long.
Why NSW cares anyway
NSW’s coal fleet is leaving faster than its replacement generation is arriving, and that mismatch is the central tension in the state’s whole transition story. Offshore wind in the Illawarra is one of the few large-scale generation options that sits close to Sydney’s demand centre rather than out in the state’s west, which matters for transmission cost and losses. It also sits near a workforce and a manufacturing base, Port Kembla’s steelworks and the associated trades, that the state government has been keen to badge as a future offshore wind supply chain hub. That’s a real strategic logic. It’s just a slower one than the renders suggest, and it runs on a different clock to the Eraring closure timeline the state is actually managing against right now.
What I’d actually watch for
Forget turbine counts for the next couple of years. The things that will tell you whether this project is real are duller than that: whether BlueFloat lodges an environmental impact statement that survives first contact with the whale-watching submissions, whether a connection application actually goes into the queue with the relevant network business, and whether the commercial licence conversion happens inside the feasibility window rather than needing an extension. I’d also watch the fishing industry consultation process closely, because that’s usually where these projects either find a workable compromise or grind into years of objection.
My honest read, and I’ll own this as an opinion rather than a fact: the shrunk, pushed-back zone was a sensible planning response to legitimate coastal concerns, but it didn’t solve the underlying problem, which is that nobody has yet shown a bankable floating offshore wind project operating at this scale anywhere in the country. Until that changes, Illawarra is a live feasibility licence with a serious developer attached, not a power station with a date on it.
I’ll be back down the coast before summer to see whether the survey vessels have actually shown up offshore. Until then, the Sea Cliff Bridge view stays exactly as it is.
– Callum Hayes, Wind & Offshore Correspondent
Photo by Karsten Würth on Unsplash