Stand on Bald Hill at Stanwell Park on a clear morning and you can see most of the Illawarra coast from Wollongong down past Kiama. You can’t yet see a single turbine out there, and depending who you ask, that’s either a relief or a missed opportunity a decade in the making. The declared zone off the Illawarra is real, it’s gazetted, and one developer — BlueFloat Energy — has a feasibility licence over a chunk of it. What it doesn’t have is a turbine in the water, a confirmed grid connection point, or a construction timeline anyone’s willing to put a number on.
The zone that shrank #
The federal government’s original consultation area for Illawarra offshore wind was big — roughly 1,000 square kilometres, starting close enough to shore that you could have watched turbines from the Grand Pacific Drive. After a submission process that ran hot with objections from surf clubs, commercial fishers, the Illawarra escarpment lobby and, notably, the Department of Defence over training corridors linked to HMAS Albatross at Nowra, the then Minister for Climate Change and Energy Chris Bowen declared a much smaller zone in mid-2024. It was pushed further offshore and trimmed on both the northern and southern edges.
That’s the pattern across every one of the six declared offshore zones so far — Gippsland, the Hunter, the Southern Ocean off Victoria, Bass Strait and now Illawarra — the consultation map is always bigger than the declared one. Illawarra just copped the sharpest haircut, proportionally, of any of them. I’d argue that’s the process working as intended rather than a defeat for the industry, though you won’t hear a developer say that on the record.
What BlueFloat is actually proposing #
BlueFloat Energy, the Spanish-founded developer that’s also chasing projects off Newcastle and in Gippsland, holds a feasibility licence over part of the Illawarra zone under its Escarpment Wind project. The company’s own public statements describe a floating wind farm in the multi-gigawatt range, sized against what the water depth and zone footprint can physically hold, not against some marketing ceiling. Feasibility licences under the Offshore Electricity Infrastructure Act 2021 don’t guarantee construction. They buy seven years to do metocean surveys, environmental assessment and — critically — to find someone willing to build the transmission to shore.
I’ve sat through enough of these project briefings now to have a rule: ignore the top-line megawatt number until there’s a connection agreement with Transgrid or AEMO’s network on the table. Everything before that is an engineering ceiling, not a plan.
Floating, not fixed, and why that matters #
Unlike the Gippsland zone, where water shallows out enough for fixed-bottom monopiles closer to shore, the seabed off the Illawarra drops away quickly. That pushes any project toward floating platform technology, which is exactly what our own explainer on fixed-bottom versus floating turbines gets into — floating is proven at small scale in Scotland and Portugal, but nobody has built it at gigawatt scale anywhere in the world yet. That’s not a knock on BlueFloat specifically. It’s a statement about where the whole floating offshore wind industry sits globally, and Australia’s zones, Illawarra included, are betting on that curve maturing on someone else’s dime first.
The opposition that isn’t going away #
Local pushback in the Illawarra has been persistent and organised, running through community groups worried about sightlines from the escarpment and beaches, commercial and recreational fishers concerned about access to grounds off Bass Point and Ulladulla, and whale-watch operators pointing to the humpback migration corridor that runs close along this stretch of coast every winter. None of that opposition stopped the zone being declared, but it shaped where the boundary sits and it will shape every environmental approval that follows under the EPBC Act process. Anyone who tells you Illawarra offshore wind is a done deal because the zone exists hasn’t read the submissions register.
Compare that to how things have gone in the Hunter, where the broader push for offshore wind power in Australia has had an easier run partly because the zone sits further from population centres. Illawarra was always going to be the harder sell — it’s dense, it’s visible, and Wollongong’s economy still leans on Port Kembla’s steelworks and coal-linked jobs, which makes the politics of a big renewables project sitting offshore more complicated than developers like to admit in their glossy briefings.
Grid connection: the part nobody’s solved #
This is where I get sceptical, and where the render always looks better than the substation queue. There’s no confirmed connection point for Illawarra offshore wind into the NSW network. The obvious candidates are the existing transmission infrastructure around the Illawarra coal fleet — Tallawarra, and the corridors that already run power north to Sydney — but retrofitting that capacity for gigawatt-scale offshore generation isn’t a small augmentation, it’s a rebuild. AEMO’s own planning work, including its Integrated System Plan, flags NSW transmission constraints as one of the binding limits on how fast any offshore capacity in this state can actually connect, regardless of how quickly a developer can finish surveys.
Feasibility licence in hand is a start. It is not a grid connection agreement, and it is not a slot in the connection queue. Until BlueFloat or anyone else in this zone has both of those things locked down, the megawatt figures quoted in investor decks are a ceiling, not a forecast.
The money question and the Capacity Investment Scheme #
Offshore wind anywhere in Australia is going to need policy support to get built, and the mechanism most developers are eyeing is the Capacity Investment Scheme, the federal underwriting programme that’s already backing a wave of battery and onshore renewables projects. Whether offshore wind gets a meaningful slice of future CIS tender rounds is an open question — it’s a far more expensive technology per megawatt than onshore wind or big batteries, and government has been cautious about picking early winners in a sector with a global track record of cost blowouts. The UK’s most recent offshore wind auction rounds are the cautionary tale developers here don’t love talking about; strike prices that looked attractive on paper struggled when steel, vessel day-rates and financing costs moved against them.
Squadron Energy’s experience chasing offshore approvals elsewhere in NSW, covered in our assessment of Andrew Forrest’s renewables bet, shows how long and uncertain this pipeline is even for a well-capitalised local player. BlueFloat, as an offshore specialist without Squadron’s balance sheet, faces the same regulatory grind with less room to absorb delay.
What it means for the grid, eventually #
If Illawarra offshore wind gets built at any real scale, it changes the supply picture for southern Sydney and the Illawarra load centre in a way that onshore renewables further inland can’t, because offshore wind blows at different times of day than solar and, in this stretch of coast, tends to run stronger through the afternoon and evening — useful timing against the demand peak our piece on wholesale price volatility keeps coming back to. That’s the theoretical case for offshore wind everywhere, and it’s a genuinely good one. It just runs headlong into the practical case: floating technology that’s unproven at scale, a grid that isn’t ready, and a feasibility licence timeline measured in years before a single turbine order gets placed.
I grew up swimming off Merewether up in Newcastle, and I still duck down the coast for an early lap when I’m reporting on the Hunter zone. Standing on the sand at Stanwell Park looking south, it’s easy to imagine turbines on the horizon. It’s a much longer road from that image to a connection agreement with Transgrid. The Illawarra zone is declared, the licence is issued, and the opposition hasn’t gone anywhere. Ask me again in eighteen months whether BlueFloat has an actual construction timeline, and I suspect the honest answer will still be: not yet.
— Callum Hayes, Wind & Offshore Correspondent