Australia Offshore Wind Power Market: Share, Growth, Trends & Renewable Energy

Market Overview

• In 2024, the Australia offshore wind power market was valued at USD 950.88 million.
• It is forecast to reach approximately USD 5,694.26 million by 2033, rising at a compound annual growth rate (CAGR) of ~19.60% over 2025-2033. IMARC Group

Important segments of the market are:

• Installation type: Fixed structures vs Floating structures.
• Water depth: Up to 30m vs Above 30m.
• Capacity classes: Up to 3MW, 3–5MW, Above 5MW.
• Regions: NSW & ACT, Victoria & Tasmania, Queensland, Northern Territory & South Australia, Western Australia.
• Key growth drivers include supportive government policies, technological advances (both fixed and floating wind), large coastline with strong wind resources, increasing demand for clean energy, and the potential for offshore wind to power green hydrogen and support export-oriented clean energy.

Key Trends & Market Drivers

1. Policy & Feasibility Licences Moving Forward

The federal government has begun issuing offshore wind feasibility licences: in early-2024, six projects off the Gippsland coast (Victoria) received licences, potentially totalling ~12 GW, with further stages expected.

2. Floating vs Fixed Foundation Debate

Much of Australia’s nearshore coast is shallow, enabling fixed-bottom turbines where feasible. But in deeper waters, floating structures become essential. Floating projects tend to be more costly and take longer to develop; still, technology progress is pushing interest.

3. Abundant Resources, Strategic Zones Declared

Regions such as Gippsland in Victoria are emerging as front-runners. They are the first declared offshore wind zones, benefiting from favourable bathymetry, wind conditions, and proximity to existing grid infrastructure.

4. Rising Investment, International Players Involved

Major international and domestic developers are participating: utilities, global wind companies, renewables financiers. Partnerships and feasibility work are attracting attention (and capital) but global cost pressures (materials, labour, interest rates) are also being felt.

5. Regulatory & Environmental Challenges

While licences and zones are opening, environmental approvals, community consultation (including First Nations involvement), marine ecology, seabed use, coastal impacts, and transmission infrastructure remain complex challenges. Also, costs of floating installations remain significantly higher.

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Opportunities in the Australian Offshore Wind Power Market

Large-scale Projects in Declared Zones

Projects with feasibility licensing in Gippsland and other zones offer strong potential. Early movers in zones with clearer regulatory environments stand to gain first-mover advantages.

Floating Offshore Wind

As fixed-bottom options reach their geographical limits (water depth, seabed conditions), floating offshore wind becomes crucial. Businesses that can reduce cost and enhance reliability in floating platforms will be well placed.

Green Hydrogen Integration

Co-locating offshore wind with hydrogen production (electrolysis) for domestic use or export is a major opportunity. High energy output offshore can provide power for energy-intensive electrolysers.

Local Supply Chain & Port Infrastructure Development

To lower cost, reduce time-to-market, and increase local economic benefits, Australia needs port upgrades, ship fabrication, turbine component manufacture, vessel availability, and skilled labour.

Regulatory Streamlining & Community Engagement

Projects that navigate environmental approvals, marine use, Indigenous consultation, and community acceptance will be more resilient. Clarity in leasing, permitting, and regulations will reduce risk for investors.

Risk Mitigation Against Rising Costs

Inflation, labour shortages, material cost, and interest rates are relevant globally. Mitigation strategies (bulk procurement, long-term contracts, local sourcing) and government incentive / financial support can help.

Recent News & Developments in the Australia Offshore Wind Power Market

Issuance of Gippsland Feasibility Licences (May 2024)

Six offshore wind feasibility licences were issued for projects off Gippsland, Victoria, potentially adding ~12GW of capacity. Additional capacity is expected in future rounds.

Industry Caution & Scaling Back by Some Developers (Mid-2025)

Companies like BlueFloat Energy and Equinor have scaled back or reconsidered investments in certain projects (e.g. Illawarra, Gippsland Dawn) amid rising global costs, funding pressures, and investment uncertainty.

Approval of Offshore Zones Such as Illawarra

The Illawarra coast zone (south of Sydney) has been formally approved as an offshore wind zone (approximately 1,022 sq km), though with reductions and constraints (distance from shore, environmental protections). It’s expected to deliver several gigawatts of capacity and power over a million homes.

Global Headwinds Impact Australia’s Offshore Wind Sector

Inflation, rising capital costs, supply chain disruptions, and rising interest rates are making project economics more challenging. Public and private investors are assessing these risks.

Infrastructure & Planning Advances

There is growing emphasis on transmission capacity, port readiness, and clarity in permitting/licensing. Regulatory frameworks are being refined, feasibility studies supported, and zones declared to reduce lead times.

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• For energy planners & policymakers, offshore wind represents one of the few scalable and steady renewable sources that can help meet Australia’s ambitious renewable targets and reduce reliance on fossil fuels. But success depends on policy clarity, environmental safeguards, and infrastructure readiness.
• For investors, the forecast ~19.6% CAGR and multi-billion dollar growth suggest offshore wind offers high upside—but also carries elevated early-stage risk. Projects with strong regulatory alignment, local value chains, and solid cost management are better positioned.
• For communities & environment, offshore wind means potential job creation (ports, construction, maintenance), regional economic benefits, and cleaner air—but also requires careful balance with marine ecosystems, first-nations interests, coastal landscapes, and biodiversity.
• For technology & manufacturing sectors, demand for floating platforms, deep water solutions, turbine innovation, installation vessels, subsea cabling, and supporting infrastructure will stimulate growth and opportunity.
• For Australia’s broader climate goals, offshore wind may be essential part of a diversified clean energy mix along with solar, onshore wind, storage, hydro, and hydrogen. Delays or setbacks could worsen energy price risks, emissions trajectories, and reliability challenges.