The Victorian government has shelved its September auction for offshore wind projects in Gippsland after developers warned they would not move ahead without government funding commitments.
Energy Minister Lily D’Ambrosio told the Asia Pacific Wind Energy Summit in Melbourne on Sept. 16 that the long-planned competitive auction would be “indefinitely delayed” at the request of industry players.
“We have heard clearly from some prospective project developers in offshore wind here in Victoria that they do not want us to open up the auction … until there is certainty about funding as well as the enabling infrastructure,” D’Ambrosio was quoted in the Australian Financial Review.
The minister said the state’s inability to lock in a joint funding deal with Canberra remained the “central dilemma” for offshore wind.
“The Commonwealth has a critical and large role to play, and it needs to be more than has been delivered to date,” she added. A new timeline is expected before the end of the year.
Projects in Limbo as Industry Wavers
Victoria has granted feasibility licences to 11 projects in the Gippsland offshore wind zone, though only a handful are seen as advanced enough to compete in an auction. So far, just one developer, BlueFloat Energy, has withdrawn from the area.
Elsewhere, projects have collapsed as global backers retreat. Norwegian oil and gas company Equinor has exited four Australian offshore ventures since 2022, underscoring the financial and political headwinds facing the sector.
These projects were a cornerstone of the Allan government’s pledge to source 95 per cent of the state’s electricity from renewables by the same year.
Campaigner Says Community Upset
Campaigners say the pause adds more uncertainty for communities already promised jobs and investment from offshore wind.
“It’s disappointing that the Albanese government has not yet partnered with the Victorian government to deliver the country’s first offshore wind auction,” said Friends of the Earth campaigner Anna Langford.
“Communities in future offshore wind regions deserve greater certainty after hearing the benefits of offshore wind talked up for so many years,” she added.
Federal Government Moves to Support Lagging Industry
At the federal level, the Albanese government is also trying to contend with the renewable sector’s challenges, moving to cut several fees for wind turbine farm applications.
For the next two years, the biggest cut will be to the offshore wind turbine licence application fee from $300,000 to just $20,000.
Annual levies on transmission and infrastructure licences will be halved, while charges for feasibility, research and demonstration licences will be waived altogether.
Energy Minister Chris Bowen said the measures were designed to keep projects alive at a time when developers are facing soaring costs and policy reversals in key overseas markets.
“These changes recognise the economic pressures on the sector and make Australia a more attractive prospect for investment,” he said.
The Albanese government is set to release its 2035 emissions reduction target soon.
