Victorian government announces August offshore wind auction

The auction, marking Australia’s first open tender for offshore wind projects, is seeking to meet the state’s target for two gigawatts (GW) of offshore wind generation by 2032 and nine GW by 2040. The Victorian government will open tender for the first two GW of capacity after the original auction, slated for September 2025, was delayed.

Lily D’Ambrosio, Victoria’s minister for energy and resources, said: “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.”

A previous auction, slated for September 2025, was delayed because of global investment hurdles and the risk of attracting too few bidders. The Victorian government said that the offshore wind industry is expected to support over 6,000 jobs and generate investment in the billions.

Leanne Olden, an expert in renewable energy projects at Pinsent Masons, said: “This announcement is welcome news for the industry because it adds greater certainty to the viability of offshore wind projects.”

“Offshore wind is an important part of Australia’s long-term transition to renewable energy,” she said.

In December, all state and federal energy ministers, aside from Queensland’s, endorsed the Nelson review’s recommendations, including the development of an ‘Electricity Services Entry Mechanism’ (ESEM), which aims to ensure long-term investment in Australia’s National Energy Market (NEM) by providing revenue support for new generation capacity.

The ESEM is to replace the capacity investment scheme (CIS), the Australian federal government’s current underwriting mechanism for renewable projects, from 2027. In its media release about the upcoming auction, the Victorian government flagged that the ESEM will be an important support mechanism for the nascent offshore wind industry in Australia.

“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,” D’Ambrosio said.

The design of the auction is yet to be released, but will be announced following consultation with the offshore wind energy industry.