Offshore wind plans given major project status as sector hits “critical inflection point”

The Victorian offshore wind plans of Jera Nex bp have been awarded Major Project Status by the federal government, in a nod to the giga-scale project’s key role in weaning the national grid off coal – and a welcome bit of positive news for the fledgling sector.

The 1 GW Blue Mackerel North project, which holds a feasibility licence in the Gippsland offshore wind zone, is being led by Jera Nex bp, a joint venture with the renewables arm of Japan’s largest power generation company, Jera, and global oil and gas supermajor, bp.

Blue Mackerel is proposed for a 163 square kilometre area around 10 km from the shore between Woodside and Seaspray in Victoria’s south east (see map below).

The project is currently in the process of undertaking detailed environmental assessments and marine surveys, with the Jera Nex bp team also engaging with stakeholders and the community and identifying opportunities for community benefits.

Jera Nex bp says Major Project Status (MPS) – awarded this week by the federal minister for industry, innovation and science, Tim Ayres – acknowledges Blue Mackerel’s key role in Australia’s path to net zero.

On the more practical side, MPS gives Blue Mackerel access to dedicated support from the Federal Major Projects Facilitation Agency (MPFA), that will help it to navigate the “robust environmental and regulatory approvals process.”

October 2025 map of Gippsland offshore wind feasibility licences. Image: Victoria Department of Energy, Environment and Climate Change

Jera Nex bp country manager, Australia, Anil Chanana, says the federal government’s granting of MPS to Blue Mackerel sends a strong signal of its commitment to offshore wind at a time when the sector is at a “critical inflection point,” both globally and at home.

“What it means is that government recognises that this project is of economic significance,” Chanana told Renew Economy on Friday.

“What I mean by that is that this project has the potential to help the Australian economy. It can also help generate jobs, local employment, and more importantly, this being a renewable energy project, it would help Australia achieve its net net zero emissions target.

“As one of the first offshore wind projects to secure a feasibility licence – and the first with an approved Management Plan under the new offshore regulations – Blue Mackerel is ideally positioned to help replace retiring coal generation with large-scale, reliable renewable energy,” he said in a statement.

The federal show of support for Blue Mackerel comes less than a week after a third project proposed for waters off the Gippsland coast surrendered its licence and pulled out of the race to develop Australia’s first ever offshore wind zone.

AGL Energy last Friday pulled its Gippsland Skies offshore wind project out of contention for the Gippsland zone, citing challenging economics and a renewed focus on onshore wind and firming projects, including nearly 1 gigawatt of grid-scale batteries.

The 2.5 gigawatt (GW) Gippsland Skies project was proposed for development south-west of Wilson’s Promontory and among the first of its kind to join the federal government’s EPBC process, to get green clearance on the the early stages of work under its feasibility licence. 

Roughly a month earlier, German energy giant RWE scrapped its own offshore wind plans in Australia, announcing the cancellation of the 2 gigawatt (GW) Kent project, also in the Gippsland zone. While in July, Spanish company Bluefloat Energy dumped the 2.5 GW Gippsland Dawn proposal.

Chanana says seeing these projects hand back their licences “certainly… sends a different signal” to the other proponents and to the wider industry, but he also suggests that some of “the fundamentals” of those projects might also have played a role in their decision to opt out.

“So those projects were in deeper water,” he tells Renew Economy. “Some of them possibly had a difficult export cable route to onshore… which all adds to the capex, the capital cost of the project.

“And then perhaps lack of lack of clarity from the government [on] future auctions would have also accelerated their thought processes to that they can’t see any line of sight. …That could have been another factor as well.”

Just give us a date!

Certainly, one of the key pressures facing developers vying for a spot in the Gippsland offshore wind zone has been uncertainty around the timing of the auction process, which is being run by the Victorian government.

The landmark first tender for offshore wind generation contracts was due to get underway in September this year, but instead a delay was announced, with Victoria’s energy minister Lily D’Ambrosio citing ongoing negotiations with the federal government as one of the main speedhumps.

Chanana says the word from D’Ambrosio’s office remains that it is likely to make some sort of announcement in the near future, possibly this side of Christmas. But he concedes that not knowing when the auction will be is highly problematic for prospective developers, including Jera Nex bp.

“No developer would want to keep spending money and keep deploying teams without any clarity on those future auctions,” he told Renew Economy on Friday

“If there is a delay, that’s fine. I think developers can perhaps accept that. But what they need to know is the timing.

“So even if there is a delay of 12 months, 18 months, they would want to find out from the government what is the timing for the auction so that they can, accordingly, I guess, ramp down or ramp up in light of that revised timing.”

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