Australia’s First Offshore Wind Energy Auction is Now Live
After delays and uncertainty among the developers, Australia has finally opened its first offshore wind energy auction. It has been a slow process for the country to move its offshore energy aspirations forward to catch up with its overall leadership in renewable energy.
The first auction is coming from Australia’s Victoria state in the southeast of the country and home to the city of Melbourne. Officials point out that renewables account for 45 percent of the state's total electricity generation currently.
Plans call for retiring Australia’s aging coal-fired generation capacity. However, demand is also growing, meaning the state must develop new sources.
In late 2021, Australia set forth the framework for its offshore wind energy industry, and a year later, the first wind zones were declared for the Gippsland area in Victoria. Reports said it could support as much as 10 GW of generation capacity, and Australia followed with the awarding of feasibility licenses. By 2024, it had awarded a dozen feasibility licenses, with several of the major developers actively exploring projects. Three companies, including RWE and Equinor, later relinquished their licenses. Plans for the Victoria auction were further delayed from last year as the industry continued to address the issues and sought more assurances from the Australian government.
“This auction is a giant leap towards getting Australia’s first offshore wind projects built,” said Minister for Energy and Resources Jaclyn Symes. “Victoria has some of the best offshore wind resources in the world. This auction is about harnessing that advantage and building the next generation of energy right here in Victoria.”
The auction officially opened on August 26, but the window runs for a year to August 2027. Victoria reports that the contracts will be awarded in 2028. It expects the projects to be integrated into the National Electricity Services Entry Mechanism.
According to the minister, bids will be assessed based on value for money, deliverability, and benefits for local workers, businesses, and communities.
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The first tender calls for 2 GW of offshore wind capacity, which would power up to 1.5 million homes. They said the goal is to integrate offshore wind to complement Victoria’s growing solar, onshore wind, and storage capabilities.
Victoria was the first state in Australia to legislate targets for offshore wind energy capacity. Its goal is to have the first 2 GW by 2032, grow to 4 GW by 2035, and reach 9 GW by 2040.