The Hunter Offshore Wind Project has taken a significant step forward with the awarding of a preliminary feasibility licence to the Equinor-Oceanex partnership.
The licence covers an area at the southern end of the zone. Significantly, it is away from Port Stephens and located primarily off the coast of Newcastle and Lake Macquarie.
The area represents about 40 per cent of the zone, which was formally declared a year ago.
If it proceeds it could generate over 2 gigawatts of electricity, equivalent to powering 1.2 million homes or two Tomago smelters.
It would employ around 3,000 workers during construction and create around 200-300 permanent local jobs.
It would also inject development expenditure worth hundreds of millions of dollars into the Hunter region and leverage existing heavy industry.
Climate Change and Energy Minister Chris Bowen, who will be in the Hunter on Wednesday, said the shortlisted project did the most to support the region's industries and communities while protecting the environment and sharing the ocean.
"The Hunter has been an industrial and economic powerhouse for generations, and my decision today is a big step towards providing that powerhouse with reliable renewables," he said.
"The project I've shortlisted offers the biggest rewards for the Hunter and Australia - supporting our workforce and energy security, protecting our environment and sharing our marine space with the people and industries who rely on it today."
Norwegian energy company Equinor teamed up with Australian offshore wind company Oceanex in 2022 to compete for part of the Hunter Offshore Wind zone.
Mr Bowen said only one licence had been proposed because the other applications were for overlapping areas and found to be of lower merit.
Mr Bowen will conduct further consultation with applicants and First Nations groups before a final decision is made.
Consultation with First Nations groups, communities, unions and marine users will continue throughout the feasibility licence process, while environmental studies and a detailed management plan is prepared.
As well as providing reliable renewable energy to Australian industry, offshore wind projects will be required to maximise their use of Australian supply chains and closely consult with local industry and workers on their project plans to ensure local workers and businesses benefit from the industry's establishment.
There are also clear requirements for the offshore wind developer to consult with fishers and avoid, mitigate and offset any impacts on fishing.
Mr Bowen said he expected recreational fishers would be able to travel and fish within offshore wind zone, which already occurs internationally in the United Kingdom and Denmark.
In those jurisdictions turbines are around 2 kilometres apart with an exclusion zone of just 50 metres around turbines. It means fishing vessels can go about their normal operations within the wind farm.
If feasibility for the Novocastrian Wind Pty Ltd project is proven, the developer can then apply for a commercial licence to build an offshore wind project to generate electricity commercially.
Newcastle MP Sharon Claydon said that there was no other region as well placed to take advantage of the opportunities presented by renewable energy and the offshore wind industry.
"Newcastle's world class infrastructure, our deepwater port, skilled workforce, abundant resources and energy smarts means our region is poised to lead this transformation," she said.
"A new offshore wind industry in Newcastle means new jobs in local manufacturing, construction, maritime, transport and logistics industries, as well growing our vocational education and training pathways - at TAFE and University.
"This announcement builds on the Albanese Labor Government's strong commitment to ensuring that regions like Newcastle and the Hunter play a lead role in generating, storing and distributing clean energy now and into the future."
