Victoria sets “game changing” offshore wind target of 9GW to replace coal

Victoria has announced an ambitious new plan to accelerate the rollout of offshore wind energy generation projects in the state, setting rolling targets of 2GW installed by 2030, 4GW by 2035, and 9GW by 2040.

In a State of the State speech at a CEDA luncheon in Melbourne on Friday, Victoria’s Labor Premier Daniel Andrews announced the “new and even more ambitious” renewable energy goals for the state, which he said his government planned to “meet and exceed.”

In a release detailing the new targets, the state government said the first power from offshore wind was expected as soon as 2028 following a competitive process.

“For the first time anywhere in Australia, we will set a minimum target for offshore wind power generation,” Andrews said.

“By 2032, Victoria will reach a massive 2GW of offshore wind energy production, that’s the equivalent of 20% of Victoria’s energy needs today, [and] set a target of 4GW by 2035 and, finally, 9GW by 2040 – targets, ladies and gentlemen, that we will meet and we will exceed.”

Victoria, which has legislated a target for a 50% renewable energy powered electricity grid by 2030, was the first state in Australia to have an offshore wind project proposed off its coast – albeit in federal waters.

That project, the 2.2GW Star of the South, is proposed for waters off the south coast of Gippsland in Victoria, and remains on track to be the first offshore wind farm in Australia.

In 2021, the project entered into a $43.1 million partnership with the Victorian government designed to accelerate its development, and establish the beginnings of a local Victorian offshore wind industry.

It’s overall progress has been delayed, however, by the wait for federal legislation – finally passed in November of last year – enabling offshore electricity projects to be built and operated in Australia; the Offshore Electricity Infrastructure Bill 2021.

The new, rolling targets from Victoria are clearly an effort by the state to make up for that lost ground, in an area that will be crucial to its shift to renewables beyond 50 per cent.

“[This] is the clearest and best signal that we can send to investors – to those who will build and operate and those who want to invest in this resource,” Andrews said on Friday.

“It’s more than a signal, though, it’s a message from a government with a proven track record of getting things done. And a government not prepared to simply say, well that’s a matter for the Feds, who we know will do precious little about it.”

Victoria has plenty to gain from fast-tracking investment in offshore wind. Studies have shown the state has the potential to support 13GW of capacity from coastal regions by 2050 – five times the state’s current renewable energy generation.

The Australian Energy Market Operator’s latest Integrated System Plan – its planning blueprint – now adopts as its central scenario a “step change” model that assumes all of Victoria’s brown coal generators will cease operations by around 2032.

The majority of the energy industry accept that modelling, but the likes of AGL have insisted plants such as Loy Yang A could operate until 2045, although billionaire Mike Cannon-Brookes and Brookfield have pitched a bid at AGL to fast-track that process.

Andrews said the new offshore wind goal was expected to create thousands more jobs, on top of the 24,000 jobs created through the 2030 renewable target.

“And that’s in addition to the $5.8 billion in economic activity these investments will generate themselves,” he said.

The news of the targets were swiftly welcomed by the renewable energy industry, including Star of the South.

“We welcome the release of the Victorian Offshore Wind Policy Directions Paper today and congratulate the Victorian Government on its leadership in setting strong targets for offshore wind,” said Star of the South CEO Casper Frost Thorhauge.

“It’s exciting to see the scale of this ambition, with the aim of first power by 2028, which will kick-start a new industry for Victoria.

“Offshore wind offers a bright future for Victoria and will continue Gippsland’s proud history of power generation into the future – creating clean energy, new jobs and investment in the region as coal plants retire over the coming decades,” he said.

Flotation Energy, which is behind the 1.5GW Seadragon project, situated adjacent to oil and gas platforms in the Bass Strait off Victoria’s southeast coast, also welcomed the news.

“This is an important step that will unlock billions of dollars in new investment, create highly skilled jobs and open significant opportunities for the local supply chain,” said Flotation Energy managing director Tim Sawyer on Friday afternoon.

“Offshore wind is a key enabler in the energy transition as it delivers large scale, consistent and reliable renewable energy that complements onshore wind and solar.”

The Clean Energy Investor Group also “strongly welcomed” the new targets, as “a game changer” for renewable energy investment in the state.

“There is huge appetite from investors for offshore wind development in Australia,” said CEIG chair and CEO Simon Corbell on Friday.

“The state government’s announcement today will help unlock the investment decisions delivering offshore wind development, constuction and operation worth billions,” he said.

Victoria’s energy minister, Lily D’Ambrosio, said the new targets meant that Victoria’s offshore wind resources were officially open for business, but also stressed that “the real work” would start now.

“We know it will take years to plan and develop the first tranche of wind projects in Australia, due to their complexity, scale, regulatory and infrastructure requirements – and we’re ready to start that journey today,” D’Ambrosio said in a statement.

See RenewEconomy’s Offshore Wind Farm Map of Australia