Australia’s first offshore wind energy auction set to launch in September

Victoria will launch Australia’s first ever offshore wind energy auction in September this year, the state government has confirmed, with contracts expected to be awarded before October, 2026.

In an update on the next steps for offshore wind in Victoria the Labor Allen government has set out some of the key dates and details of how it will support construction of the nation’s first offshore wind farms, and meet its own targets for 2GW of capacity by 2032, 4GW by 2035 and 9GW by 2040.

State energy minister Lily D’Ambrosio says the plan is to launch an offshore wind generation auction process in September, having kicked off a confidential Registration of Interest (ROI) process for feasibility licence holders last month, that will close in May 2025.

The federal Labor government has awarded 12 feasibility licences to offshore wind projects proposed for the Gippsland declared zone and one feasibility licence for the Southern Ocean zone. (See maps below.)

Gippsland zone and feasibility licence holders, above, and Southern Ocean zone and feasibility licence holder, below. Source: Victoria government

D’Ambrosio says the ROI process is “less onerous” than an Expression of Interest (EOI) process, which which would require feasibility licence holders to supply, and be assessed on, a range of information relating to their project status.

Rather, the ROI process is about giving feasibility licence holders access to the information they need to work up a Request for Proposal (RFP) by September.

The auction will award offshore wind projects a contract-for-difference (CfD) – a common government support mechanism for driving early renewable energy development, by providing a generator with a fixed price for electricity over a set period – as well as an availability payment.

D’Ambrosio says the CfD will provide investment certainty for proponents while the availability payment will only be made once infrastructure is generating electricity, providing energy security.  

Project proponents will also be required to provide additional benefits to local communities – above what is being required under the Renewable Energy Zones Community Benefits Scheme, the government’s latest Offshore Wind Energy Implementation Statement says. 

Industry will also be expected to work towards a minimum local content requirement of 80 per cent for the operations and maintenance phase – 2032 onwards – of the first tranche of projects. During this period 10 per cent of all labour hours will be worked by apprentices, trainees and cadets. 

To this end, D’Ambrosio says the government will soon open grant applications for up to $4.9 million to run the Wind Worker Training Centre. 

“We’re giving industry the certainty it needs to invest and help us start building the renewable energy Victoria needs to push down energy bills,” the minister said in a statement last week.

“Victoria’s offshore wind industry will provide jobs and career pathways for thousands of workers and boost local businesses through manufacturing and supply chain development.”

The big step forward for Australia’s nascent offshore wind industry comes mid-way through a federal election campaign in which the two major parties are proposing two very different paths forward on energy.

On offshore wind, federal Labor has made a decent start on what is promising to be a protracted and arduous process, having declared six development zones around the country and now working through the awarding of feasibility licences and then putting projects through the environmental and development approvals processes.

The federal Coalition, meanwhile, has vowed to scrap offshore wind zones, “rip up contracts” and sink billion dollar projects. In Victoria, Dutton has promised to rescind the Southern Offshore wind zone – pictured in lower map, above – where the 1.2 gigawatt (GW) Spinifex Offshore project was recently offered a feasibility licence by federal Labor.