Onshore wind and solar started developing decades ago and are becoming mature industries with a clear value proposition. Offshore wind is a step behind in technology and cost.

The first offshore wind farm was built more than 20 years ago in Denmark. It was small and hardly made any power. It was a start, nonetheless, and from this point offshore wind gained popularity in other parts of Northern Europe and the UK.

Today, it has reached the point where Germany was able to run an unsubsidised offshore wind auction: market forces allowed offshore wind to make money on its own. This is an important milestone for any technology.

Germany subsidised the industry for years, gradually winding it down to the point where it can now host unsubsidised auctions with a lot of competition for offshore wind rights. To get to a similar position, Australia will absolutely need subsidies. It is not yet possible to start the industry without it. Offshore wind, as a technology, is initially expensive and needs the establishment of an entire supply chain.

Modern offshore wind blades are more than 100 metres long and don’t come in pieces that attach together – they come as giant single blades. For this reason, manufacturing everything in China or Europe then shipping it to Australia would be expensive and impractical, so generally it needs a local manufacturing supply chain. This carries the added benefit of creating a local industry that can eventually become an unsubsidised source of Australian energy.

There is a big outlay to establish a manufacturing base. This also means that the fifth wind farm, for example, becomes cheaper after the first four have been built. But the first is very expensive, which is where subsidies come in.

Europe and the UK are reaching that point of lower subsidies. Meanwhile, the US is investing lots of money into subsidies and supply chains, and should have a far more mature offshore wind market in five years. Australia is a step behind.

Victoria is already developing offshore wind zones. This will help lower the cost of the technology and meet energy transition goals. The cost will come down further as New South Wales and South Australia get involved – wherever there is space, and the wind and the sea depth stack up.

Eventually we will get to a point where lots of power is generated from solar, onshore wind and offshore wind. These will complement each other and have storage to tie it all together. Maybe there will also be gas generation available for emergencies. But I see a point where at least 80-90 per cent of power can be renewable. It would be cheap, clean, long-lasting and a real endgame solution.

Onshore wind needs many approvals from farmers and landowners, and can be an eyesore. Offshore wind, on the other hand, tends to be many kilometres from land and the turbines can be larger.

Offshore wind can be built relatively close to where people live. To build a large onshore wind farm 20 kilometres from Sydney today would mean dealing with a huge number of local groups – it would be a mess. Offshore wind, however, can be built off the coast and generate a massive amount of power close to where it needs to be.