The clock is ticking on Australia’s promised first offshore wind auction as state election looms

The Victoria state Labor government continues to promise its offshore wind underwriting auction will happen in August, but remains tight lipped on when it will begin – with just nine working days left in the month.

“We continue to be focused on starting the auction this month,” Offshore Wind Energy Victoria (OWEV) director Anh Mai told a conference in Gippsland this week.

New state energy minister Jaclyn Symes, who did not attend the Gippsland New Energy Conference (GNEC), also promised in a video message to deliver the auction this month. 

The already delayed auction is designed to provide financial support to up to 2 gigawatts (GW) of offshore wind capacity, which the state government wants to be in place by 2032, and the auction is seen as a critical milestone for an industry that now needs investment signals.

“We are all waiting on the Victorian government… for the auction to come out. I think that really sets a pathway for all of us here on stage to to get from where we are today to the first project and the first projects being built,” Iberdrola Australia executive Marcus Dowling said at the Gippsland forum. 

“We need the auction framework. We need investment confidence in that. We need the port, the grid infrastructure. We need all these key pieces to come together so we can invest in projects. Then that needs to flow through to supply chain.”

The auction, most likely set as a contract-for-difference with an availability payment, was delayed almost a year ago.

Then-energy minister Lily D’Ambrosio said at the time there were infrastructure and funding issues that needed finalising before they could launch. 

There is now added uncertainty because of the ructions in state politics, which has seen a new premier and a new energy minister, and comes as the state heads to polls in November that could see a change in government.

Dowling says suppliers need to see a pipeline of projects, and a pipeline of future auctions, to commit to Australia.

“I think what’s important is seeing that we do move from an announcement and enthusiasm around the first auction to credible funded investment program that takes us from 2 GW all the way through to 9 GW,” he says.

“You won’t see supply chain invest on one or two projects. There needs to be an industry. There needs to be a pipeline of projects to see investment in offshore wind.”

There are nine active licences remaining in Victoria’s Gippsland zone, with a combined proposed generation capacity of more than 20 GW. 

It’s expected that when licence fees kick back in from 2027, after being waived and reduced in 2025 to support the industry, less committed proponents will hand in their licences. 

There are already questions over whether the former Corio project, Great Eastern, is still live. Corio was disbanded last year and all of its staff let go after owner Macquarie failed to sell it. 

The remaining assets – the licence, any finished environmental studies, and $16 million in state grant funding for feasibility studies – are currently housed inside Macquarie corporate, but Renew Economy understands that no one from the project has been active in Gippsland community or public forums for some time.

Port keen to get moving

Delays aren’t just holding up proponents, with the preferred port also waiting for the go-ahead to start looking for contractors who could handle the redevelopment.

The Port of Hastings is finalising its environmental effects statement for the 40 hectare extension that will support the offshore wind industry, and expects both state and EPBC decisions on its development applications towards the end of next year. 

Port of Hastings chief Matt Thorpe says the work on both is on track and there have been no new surprises.

But while the state-owned organisation is ready to ask for expressions of interest for the engineering and construction side of things, it has had to wait until after the auction is announced to start that process. 

Given Victoria’s targets for offshore wind, and the delays in getting the port redevelopment underway when a sub-par EPBC application was rejected, the timelines for building the country’s first offshore wind sector are tight.

Victoria wants to have 2 GW of offshore wind turbines hitting the grid in 2032, 4 GW by 2035 and 9 GW by 2040. 

However, construction on the port could start, at best, in 2028 and is set to take at least three years to finish. 

A new port is necessary to handle the huge weights of offshore wind turbine parts. 

Thorpe says that typical ports are designed to handle weights of  5 tonnes per square metre, but offshore wind requires that to jump to 25 tonnes were square metre, “sometimes even more.”

“There isn’t a port in Australia that’s got that, and space and suitable proximity and deep water,” he said at GNEC.

And just as the port needs the auction to go ahead before it can start lining up suppliers and contractors, so do the proponents who don’t expect to win a deal in the initial auction round. 

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