Australia to Launch First Offshore Wind Auction in August After Year-Long Delay
The Victorian government has announced plans to launch Australia’s first offshore wind auction in August. This long-awaited auction comes after significant delays based on uncertainties surrounding port and transmission facilities. Victoria aims to establish itself as a leader in the offshore wind industry with ambitious targets.
Victoria’s Offshore Wind Goals
Victoria is the only state in Australia with specific offshore wind targets. The government plans to achieve:
- 2 gigawatts (GW) of offshore wind capacity by 2032
- 9 GW by 2040
The auction process was originally set to commence in September of the previous year but was postponed.
Upcoming Auction Details
Energy Minister Lily D’Ambrosio announced that the initial request for tender will open in August. This involves 2 GW of capacity.
Ongoing design work for this auction will focus on the Electricity Services Entry Mechanism (ESEM). This mechanism, proposed by the Nelson review, aims to support renewable energy projects, including offshore wind.
Industry Impact and Expectations
D’Ambrosio emphasized the need for industry certainty to encourage investment. The government is working closely with developers to ensure that the auction inspires competition and secures quality projects.
“Victoria will host the country’s first offshore wind industry,” D’Ambrosio declared. She believes the state’s abundant resources and proactive initiatives will benefit all Victorians.
Global Context
Meanwhile, the offshore wind industry is experiencing varied success worldwide. In the United States, regulatory challenges persist, while Europe is moving forward with significant developments. Recently, ten European nations announced plans for an interconnected offshore wind grid in the North Sea, targeting 100 GW of renewable electricity.
Competitive Landscape
Despite positive steps, analysts are concerned about the cost of offshore wind in Australia compared to the UK. Recent UK tenders revealed capacity prices lower than expected but higher than Australia’s current wholesale market prices.
Environmental groups view Victoria’s upcoming auction as a significant milestone for the state’s renewable energy strategy. Supporters of the Star of the South project have expressed readiness to proceed, citing environmental approvals and land acquisitions.
Renewable Energy Momentum in Victoria
Victoria has already made strides in renewable energy, achieving 42.4% of its electricity from renewables last financial year. This progress has contributed to the state having the lowest wholesale electricity prices in Australia.
Environment Victoria believes that expanding the offshore wind industry will enhance reliability and replace aging coal-fired power plants over the next decade. As Victoria moves toward a goal of 95% renewables by 2035, offshore wind is seen as a crucial element of its future energy mix.
Job Creation and Economic Benefits
The offshore wind sector is anticipated to create over 6,000 jobs and stimulate billions in investment. Gippsland, in particular, is identified as a key region for developing these resources.
The Victorian government stated, “Building new renewable sources adds affordable energy to the grid, helping to lower power bills for everyone.”
Conclusion
This upcoming auction is a pivotal moment for Victoria’s renewable energy landscape, promising significant economic and environmental benefits. As the state moves closer to its ambitious offshore wind targets, the impact on local communities and the energy market will be closely watched.
