The Victorian government now finally plans to hold the much-delayed first auction for offshore wind farms in Australia in August. The auction process was initially supposed to kick off last September, but ongoing issues relating to infrastructure needs and an uncertain offtake market led to several setbacks.
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The Victorian Minister for Energy and Resources, Lily D’Ambrosio, has declared the time is now – the request for tender (RFP) for the offshore wind industry auction will open for an initial two gigawatts (GW) of capacity.
“We want to give industry the certainty it needs to invest and help us keep building the renewable energy Victoria needs to push down energy bills,” she stated.
“We’re working closely with developers on the progress of this exciting auction to ensure strong competition… and best value for Victorians. We’ve always said Victoria will host the country’s first offshore wind industry, and that’s why Victoria pushed for the ESEM to accommodate technologies including offshore wind.”
While there are ongoing uncertainties associated with the local wind industry as a whole, the Victorian plan has received strong support. One backer, CEO of Australia’s Clean Energy Council CEO Jackie Trade, said the announcement marked an important step in progressing local offshore wind projects toward delivery.
“The auction is a critical step towards delivering the offshore industry in Victoria and moving projects towards the delivery phase,” Ms Trad said.
“Offshore wind is an important part of the future electricity mix, supporting system security and reliability in the grid as ageing coal-fired power exits the system.
“The generating potential of offshore wind will play a vital role in maintaining reliability in Victoria’s power system as ageing coal-fired generators retire, with stronger and more consistent wind resources enabling large-scale projects to deliver power more predictably across the day and year.”
The VIC gov’t believes offshore wind developments will generate strong employment across construction, manufacturing, ports and ongoing operations, with significant flow-on benefits for regional supply chains, particularly in Gippsland.
The state’s energy workforce is projected to grow to more than 67,000 workers by CY40 – more than double its current size –with offshore wind alone supporting a peak construction workforce of around 2370 jobs alongside 4269 workers in onshore wind.
“We look forward to working constructively to ensure offshore wind projects are delivered responsibly with strong community engagement, environmental protections and benefits for local workers and businesses,” Ms Trad said.
The Global Wind Energy Council also welcomed the announcement. “It marks a significant moment for the state and Australia. The continued development of renewable energy helps transform the country’s energy mix. Offshore wind has a vital role in Australia’s clean and secure energy future,” said deputy CEO Rebecca Williams.
“The key now is to focus on delivery and realisation of the state’s terrific wind potential. As Australia’s coal fleet powers down, it is time to power up the offshore wind industry and ensure everything is done to get turbines in the water as rapidly as possible.”
“The auction is a key step, but it is still far from the finish line. The industry is ready to work constructively with state and federal gov’ts, and alongside local communities, to deliver the benefits of offshore wind energy as rapidly as possible.”
While international wind energy specialists are expected to dominate the auction, Australia also has several listed companies, including AGL Energy (ASX:AGL), Origin Energy (ASX:ORG), and Mercury NZ (ASX:MCY), which potentially may throw their hat in the ring. Offshore support companies like Cyan Renewables (formerly MMA Offshore) will also be keeping an eye on proceedings.
This week’s news of the VIC wind auction comes right as the Australian Energy Market Operator announced that renewable energy sources supplied more than half of the quarterly energy demand for the first time.
Renewables, including energy storage, accounted for 51% of the supply in the December CY25 quarter, up from 46% in CY24’s corresponding period.
AEMO found wind generation increased by 29% during the period.
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