Gippsland offshore wind: Less transmission, lower electricity prices

• Study by Jacobs finds Gippsland offshore wind lowers household electricity bills because it reduces the need for new transmission lines

• Offshore wind reduces the need for new transmission by over 900 kilometres, which reduces system costs and therefore the price of electricity

• Helps keep east coast grid stable as coal exits, generates during the dinnertime peak and reduces wholesale electricity prices in NSW, Queensland and Tasmania

Gippsland offshore wind will lower wholesale electricity prices by reducing the amount of new transmission needed by over 900 kilometres, a National Electricity Market Study by Jacobs and commissioned by Star of the

South revealed today.

Reducing the amount of new transmission needed reduces total system costs, the report found. The research measured the total system effects of offshore wind, such as reducing the need for new transmission to be built and reduced fuel costs, which are not typically included in the narrower assessments of technology build costs.

The study modelled having seven gigawatts of Gippsland offshore wind in the grid by 2040 versus a scenario without offshore wind. The study also found that with offshore wind:

• There would be a $5/MWh reduction in wholesale price on average across the entire National Electricity

Market between 2033-2040, rising to a $15/MWh by 2040 (a $5.2 billion total saving).

• Lower household energy bills by $151 a year per typical Victorian household and $84 a year per typical

east coast household from 2040 onwards.

• Between 500 and 2000 kilometres less transmission (likely 934 km less) required to be built, lower

“social licence and landholder compensation costs”, cheaper electricity.

• A reduction of $4.9 billion in transmission capital costs.

• A further reduction of $1.2 billion in transmission operating costs.

• The avoidance of 7.7 GW of REZ transmission capacity augmentations.

• At least $2.5 billion of fuel cost savings from reduced gas and hydrogen use at peak times.

• Less backup gas in the grid, bringing wholesale electricity prices down.

• Reduced wholesale electricity prices in other states, including Queensland, because of the increased

energy supply during the evening peak.

• Offshore wind is perfectly matched to the dinnertime energy use peak. Onshore wind comes online after

the dinnertime peak and solar generation reduces before it.

• Offshore wind can help fill gaps during winter and summer peaks to meet seasonal electricity demand