Australia's first-ever offshore wind auction will be held in August, aiming to deliver additional gigawatts of energy for the nation's sluggish energy transition.
Victoria's climate and energy minister Lily D'Ambrosio announced the postponed tender after energy ministers last month supported the Electricity Services Entry Mechanism (ESEM).
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This new tool – which would replace the Capacity Investment Scheme from 2030 and which has come of out Tim Nelson's review of the NEM – would provide a pathway for new renewable energy projects, including offshore wind, that support the Commonwealth's and states' efforts to meet their renewable energy targets.
"We want to give industry the certainty it needs to invest and help us keep building the renewable energy Victoria needs to push down energy bills," said D'Ambrosio.
"We're working closely with developers on the progress of this exciting auction to ensure strong competition to secure the best projects and best value for Victorians.
"We've always said Victoria will host the country's first offshore wind industry and that's why Victoria pushed for the ESEM to accommodate technologies including offshore wind."
However, while the news will be welcomed by developers keen to harness Victoria's strong offshore winds, providing a degree of surety for their investment, it comes too late for several offshore wind ventures, which have already dropped their proposed projects.
It also comes just days after the federal government effectively gave up on the idea of wind farms in the Illawarra and Bass Strait regions, meaning that in total, half of the six declared zones have failed to take off.
Victoria
The state is aiming for two gigawatts of offshore wind power to be up and running by 2032 - enough electricity to power about 1.5 million homes – and doubling to four gigawatts by 2035.
This ambitious target is needed if the Allan government is to meet its 95% renewable target by 2035. However, already putting a dampener on the enthusiasm were the findings last month from the auditor-general, Andrew Greaves, who found that the 2032 offshore wind goal would not be met, adding to the fears of energy security for the region as coal-fired power stations continue to close.
Jackie Trad, the CEO of the Clean Energy Council (CEC), said the announcement marked an important step toward delivering offshore wind projects.
"The CEC welcomes the announcement by the Allan Government that the Victorian offshore wind industry auction will proceed in August this year. The auction is a critical step towards delivering the offshore industry in Victoria and moving projects towards the delivery phase," Ms Trad said.
"Offshore wind is an important part of the future electricity mix, supporting system security and reliability in the grid as ageing coal-fired power exits the system," she said.
Similarly, Southerly Ten, the developers behind the well-advanced Star of the South project, said the announcement "underscores the need to get new large-scale generation into the National Electricity Market (NEM) to maintain reliability, keep electricity prices as low as possible, and reduce emissions.
"With 90% of coal-fired capacity forecast to retire by 2035, offshore wind is critical to Australia's energy security and pathway to net zero," they said in a statement.
Illawarra and Bass make three
However, in a sector that seems prone to ebb and flow, the announcement comes just days after the federal energy and climate change minister, Chris Bowen, effectively pulled the plug on progress in the Illawarra and Bass Strait zones.
"At this time, the Government will not be granting feasibility licences for generation projects in the Illawarra, as no application was able to be progressed to licence award. BlueFloat, a prospective proponent, has withdrawn its application for a feasibility licence as it scales back its offshore wind operations worldwide. A preliminary decision has been made not to offer feasibility licences in the Bass Strait due to a lack of competitive bids," said the government's muted statement last week.
Those two zones now join the Hunter in having failed to attract any proponents for development, a conclusion reached in the Hunter when Oceanex announced it was winding up operations with its partner, global energy giant Equinor, which was doing likewise.
Alex O'Brien, the president of Responsible Future Illawarra (RFI), says the timing and manner of the announcement — made on a Friday before a long weekend, and folded into a WA-focused release, raises questions about how the government is sequencing and communicating difficult offshore wind decisions.
"This is a significant change from assurances made just six months ago that the Illawarra project was still being progressed," said O'Brien.
"As recently as July, BlueFloat was still saying it was seeking funding, local MPs were telling the community the Government would continue to support the project, and the process was being described as progressing. Six months later, the proponent has walked away, and the Government has confirmed that no feasibility licence will be issued," said O'Brien.
RFI, which has openly opposed the development of offshore wind, say they now hope the collapse of the Illawarra zone will "mark a constructive reset in how energy and decarbonisation are approached in the region."
"We support renewables in the right locations, and we acknowledge the government's commitment to decarbonisation and energy security," O'Brien said.
"However, offshore wind does not work for the Illawarra, and it does not provide a credible pathway to decarbonise our steelworks or secure long-term industrial competitiveness for the region.
"The Illawarra has been through a long and, at times, painful process over this proposal. While we raised concerns early, we would much rather this had been resolved transparently and collaboratively, without putting the community through so much uncertainty."
RFI is now calling on the government to formally close the Illawarra offshore wind zone and rule out any future relisting.
Concerted opposition
While RFI members will have been feeling jubilant over the weekend, the opposition movement continued in earnest elsewhere.
Blue Mackerel – one of the nine developers with a feasibility license for development in the Gippsland zone – held community information sessions on Saturday and Sunday, which were reportedly swamped by opponents.
A spokesperson for the No Offshore Turbines Ninety Mile Beach campaign group said the turnout was "massive" with "not one person was in support of Blue Mackerel."
"When over 500 people from small coastal towns turn up across multiple sessions in the middle of a long weekend, it's clear this project has no social licence in our community.
"Across the board, the message was the same: the community came out to say no to the Blue Mackerel project," said the spokesperson.
