A new study has found Gippsland’s proposed offshore wind developments could reduce household electricity bills and lower wholesale power prices by significantly cutting the need for new transmission infrastructure across the National Electricity Market.
The analysis, undertaken by Jacobs and commissioned by Star of the South, modelled a scenario with seven gigawatts of offshore wind operating in the Gippsland region by 2040, compared with a system without offshore wind.
It found offshore wind could reduce the need for new transmission build by more than 900 kilometres, delivering major system-wide cost savings that flow through to electricity prices.
According to the study, reduced transmission requirements would lower overall system costs by cutting construction, operating and associated land access and “social licence” expenses.
The report estimates average wholesale electricity prices across the National Electricity Market could fall by around $5 per megawatt hour between 2033 and 2040, increasing to about $15/MWh by 2040. This equates to an estimated $5.2 billion in total savings.
It also projects household bill reductions of about $151 a year for the average Victorian household and $84 a year for typical east coast households from 2040 onwards.
The modelling suggests transmission capital costs could fall by $4.9 billion, with a further $1.2 billion saved in operating costs, alongside avoided gas and hydrogen fuel costs of about $2.5 billion.
The study also found Gippsland offshore wind would reduce reliance on gas peaking generation and improve supply during evening demand peaks, when electricity use typically spikes as households return home.
Star of the South chief executive Charles Rattray said offshore wind would provide “a steady hand” in the energy system, particularly during winter and evening peaks.
“Using Gippsland’s natural strengths can boost our energy security and prevent overusing our backup gas,” he said.
“Offshore wind helps give our National Electricity Market independence from volatile global gas and oil prices.”
Jacobs senior director of energy and power APAC Aaron Hochwimmer said offshore wind could play an important role in supporting a reliable and affordable system.
“With strong evening and winter generation and proximity to major demand centres, offshore wind can play an important role in supporting a reliable and affordable electricity system,” he said.
Farmers for Climate Action chief executive Verity Morgan-Schmidt said transmission development on farmland remained a key challenge in the energy transition, and projects needed to be delivered in a way that worked for rural communities.
“Gippsland’s offshore wind zone is close to existing transmission in a region where coal is closing over the next decade,” she said.
The study also found that without offshore wind, the market would require more onshore wind and additional gas generation, increasing reliance on constrained renewable energy zones and raising system costs.
It was commissioned by Star of the South and based on modelling from AEMO’s Integrated System Plan, CSIRO GenCost data and AEMO step change assumptions.
