Australia’s first offshore wind auction could open within months, contracts awarded by end of 2026

The Victorian government will seek expressions of interest for offshore wind projects in the Gippsland development zone within a matter of months, kicking off the country’s first auction for offshore wind in the hope that the first contracts will be awarded by the end of 2026.

State energy minister Lily D’Ambrosio said the government is making good progress towards its first offshore wind auction, despite hitting a wall on plans to build the port infrastructure necessary to deliver the projects.

The Victorian government had backed the Port of Hastings as the most suitable location for a central hub to support the state’s offshore wind targets of at least 2GW of capacity by 2032, 4GW by 2035 and 9GW by 2040.

The Western Port Bay location has also been identified as the preferred primary construction port for the 2.2GW Star of the South project – likely to be Australia’s first offshore wind farm.

But preliminary plans for the Victorian Renewable Energy Terminal have been ruled out by federal environment minister Tanya Plibersek as “clearly unacceptable,” due to impacts on the Western Port Ramsar wetlands, which are internationally protected.

As RenewEconomy has reported, the EPBC referral documents proposed the Terminal be built over an area of 146 hectares at the site at the Old Tyabb Reclamation Area, an area that includes the Ramsar wetlands.

The proposed project would require clearing of vegetation and dredging of the seabed to allow deeper ship access, as well as construction of a wharf structure of around 600m long by 100m wide that would be capped with a concrete apron.

Asked on Wednesday if any progress had been made on the stalled plans for the Victorian Renewable Energy Terminal, D’Ambrosio seemed upbeat about a resolution.

“We’re working our way through matters that the Commonwealth has raised,” the minister told the CEDA 2024 Victoria Energy Market Outlook event in Melbourne on Wednesday.

“But we know that there are ways that we can have that balanced outcome, which is protecting biodiversity and getting projects built. So we’re very confident on that,” she said.

“Meanwhile, all the other elements towards getting to our first auction are in place … and we will begin the expression of interest process in a couple of months and look to award the first projects towards the end of 2026. So it’s very exciting.”