“On track and on time:” D’Ambrosio insists Victoria’s first offshore wind auction will not be delayed

Victoria’s energy minister Lily D’Ambrosio says media reports that the state is planning to delay its first offshore wind auction by as much as a year are “just wrong,” with the developers of at least a dozen proposed projects “chomping at the bit to go to that next stage.”

D’Ambrosio’s assurances follow a report in The Australian on Thursday morning citing claims from an anonymous source that the Allan government is considering putting off its first offshore wind auction by “at least a year” amid concerns it would attract “few if any bids.”

“In reality, maybe one project would be in a position to make bids and the government thinks that by putting it back a year it will mean the majority of those with a licence will be in a position to catch up,” the source was quoted as saying.

But D’Ambrosio says the state, which has a renewable energy target of 95 per cent renewables by 2035, is sticking by the plan to meet its offshore wind targets of at least 2 gigawatts installed by 2032, 4 GW by 2035 and 9 GW by 2040.

“The claims that were made in The Australian this morning are just wrong,” the minister told a press conference on Thursday. “We are absolutely on track to deliver the nation’s first offshore wind energy industry. And on time.”

It has been a big week for Australia’s nascent offshore wind industry, with the federal government finally revealing the list of six proponents that have been awarded feasibility licences to further progress the projects they are proposing for Victoria’s Gippsland offshore wind zone.

Another six projects were named on a list being considered for feasibility licences, pending further consultation with First Nations communities.

As RenewEconomy reports here, the two lists span an impressive range of powerful and experienced renewables and offshore wind developers, include major international players such as Copenhagen Infrastructure Partners, Ørsted, Jera Nex’s Parkwind, Bluefloat Energy, Iberdrola, and RWE, and Australian gentailers AGL and Origin Energy.

These companies now have some very costly and time consuming work to do to undertake environmental assessments, geotechnical surveys and obtain approvals before a commercial licence for generating electricity can even be considered.

One of the key concerns for the first auction in Australia will be the strike prices it locks in, at a time when there have been huge jumps in the cost of building new offshore wind energy projects, even in established overseas markets.

In Australia the assumption is that the build-out – starting from scratch in Victoria – will cost well over $100/MWh, not including transmission. Prices for floating offshore wind would be a great deal higher.

“I think we need to be realistic. It’s not going to be cheap,” said Niels Steenberg, the head of offshore wind development at Siemens Gamesa at an offshore wind conference in Australia last year.

“The first three to five gigawatts are going to be expensive to build, but once we get over that hurdle, I think (offshore wind) has shown consistently that it’s reliable and it’s dependable and, in today’s market, a cheap form of energy. But the first projects are not, we have to realise that and we need to support them.”

For Victoria’s part in this, D’Ambrosio is adamant that the state’s offshore wind auction process – starting with a call for expressions of interest launched later this year – remains on track to award the first projects towards the end of 2026.

“We made commitments to deliver Australia’s first offshore wind energy projects … and we will deliver every single target as we have with all of our renewable energy targets,” the minister said.

“You only have to look at how many [feasibility] licenses were issued yesterday to see that the interests in our first auction here in Victoria are fantastic.

“People are red hot on this and it was really fantastic to see projects that are backed by really big global investors and people who know how to run offshore wind energy farms coming forward,” D’Ambrosio said.

“[They] are really chomping at the bit to go to that next stage. And I’m absolutely delighted with where we are with our delivery of the country’s first offshore wind energy projects.”