Mr BAYLEY – Thank you, Chair. Minister, I want to talk about onerous contracts and for the record, onerous contracts are where the government directs one of your businesses to enter into a contract that has unavoidable costs to be fulfilled that exceed the economic benefits expected to be received. You’ve done that in the past to kind of, I guess, shore up the economics around a couple of wind farms.
In June 2023, the Tasmanian government committed to buying energy from an offshore wind farm. The Equinor‑backed plans to develop offshore wind of up to two gigawatts in Bass Strait off the coast of northeast Tasmania won the backing of the government and through a commitment you committed to sort of source green power to put into the Bell Bay Hydrogen Hub and green ammonia.
Has the government undertaken to enter into a power purchase agreement with Equinor and, if so, what are the terms?
Mr DUIGAN – The Tasmanian government has MOUs with two offshore wind providers, Wind Equinor and Wind Energy Bass Strait Offshore Wind Energy (BOWE), and is continuing to work with those proponents on what promises to be a pretty exciting development for Tasmania given our level of natural resource out there in Bass Strait where you can rely on 10, 15 knots of breeze most days.
No, we haven’t signed any power purchase agreements. There are no contracts in that regard and no onerous contracts to the early part of your question. Certainly, we’re continuing to work with both of those two offshore proponents, noting that the Tasmanian offshore wind zone has not yet been declared by the federal minister. We are hopeful that that will happen in the coming months, but it’s not within my remit of control. I note that in the budget there is $5 million allocated for the development of a services hub at Bell Bay, the port of Bell Bay, which stands as a very likely contender to be a services delivery hub for offshore wind not only in Tasmania but in northern Bass Strait as well for the Victorian rollout of offshore wind energy, which is probably a little further advanced than we are here.
Mr BAYLEY – Thank you. I appreciate you probably don’t want to go into the exact details of the MOU, but what are the kind of things it covers and does it sign you up to a commitment to enter into a power purchase agreement or one of the GBEs at least to enter into a power purchase in the future? Have you made that commitment to those two proponents?
Mr DUIGAN – These are non‑binding MOUs that have been signed between the government and the offshore wind proponents TasRex and Equinor to further the development of offshore wind energy projects in waters off Tasmania. My understanding is that both of those MOUs are publicly available and can be found on the ReCFIT website if anyone is interested to have a look at those. We are supportive of people wanting to develop offshore wind in Tasmania.
Mr BAYLEY – Would you rule out going into a power purchase agreement?
Mr DUIGAN – No.
