Victorian Gov’t Delays Launch of First Offshore Wind Auction

The Victorian government has postponed its first offshore wind auction, which was originally set to launch in September, according to Energy Minister Lily D’Ambrosio.

Victoria has set a target of at least 2 GW of offshore wind energy by 2032, raising this up to 4 GW by 2035 and 9 GW by 2040.

Energy Minister Lily D’Ambrosio reaffirmed Victoria’s commitment to offshore wind energy but said the decision to delay the auction was due to several reasons, including setbacks in the approval of feasibility licences, the rejection of the initial referral for the Port of Hastings, and global uncertainty.

“While our aspiration was to have those preconditions in place by the end of September, and great effort has gone into attempting to achieve this, it has not been possible. As a result, today, I am disappointed to announce that Victoria will be delaying the formal procurement process for our first offshore wind auction. However, we will provide an update on the option timeline by the end of this year,” said D’Ambrosio.

On 16 September, the Australian government announced that it would make temporary changes to annual levies, application fees, reporting, and capital requirements to support early-stage projects as the industry matures.

The requirement for licence holders to have funds in place for at least 150 per cent of the estimated cost of their project activities for the next twelve months is being reduced.

Charles Rattray, chief executive of Southerly Ten, the developer of the Star of the South offshore wind project, said that the company would keep working with the local community and the government, despite the deferral.

“Southerly Ten acknowledges the Victorian Government’s announcement that it has deferred a decision about starting Australia’s first offshore wind auction until later this year. While this is disappointing, it does not change the reality that offshore wind is essential to Australia’s energy future,” added Rattray.

“With 90 percent of coal-fired capacity forecast to retire by 2035, offshore wind energy is needed to ensure energy security, price stability and a pathway to net zero.”

In 2022, the federal government declared Gippsland as Australia’s first offshore wind zone, with the potential to deliver 25 GW of renewable energy.

Twelve projects received a feasibility licence, while BlueFloat Energy withdrew from the zone in July this year.

A number of offshore wind projects across Australia have failed in recent years, largely due to the withdrawal of major international partners. Among them, Norway’s Equinor recently exited the 2 GW Novocastrian floating wind project, which the company had planned to build in partnership with Oceanex.

This month, the developers behind the 1.5 GW Navigator North offshore wind farm, Origin Energy and RES, announced they would not participate in the state’s first round auction.

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