Victoria has formally opened Australia's first offshore wind auction, with Energy Minister Jaclyn Symes launching the Request for Proposal process for the state's first two gigawatts of offshore wind — enough, the ABC reports, to power about 1.5 million homes a year.
"This auction is a giant leap towards getting Australia's first offshore wind projects built, attracting billions in investment, creating thousands of jobs and delivering the reliable power we need as coal retires," Ms Symes said.
How the auction works
Developers bid for government support, and the state assesses each bidder on its ability to deliver power and on value for money. Winners get long-term contracts under the Energy Services Entry Mechanism — a federal Energy Department recommendation designed to solve renewables' financing problem: projects live for decades, but energy buyers won't sign purchase deals that far into the future. The ESEM bridges the gap by guaranteeing a buyer for the later years, reassuring the investors who put up the money now. One catch, per the ABC: the mechanism isn't in place yet — nearly all of Australia's energy ministers agreed to it in principle last year, but Queensland remains opposed.
The bidders will come from the nine proponents holding feasibility licences off Gippsland, declared Australia's first offshore wind zone in 2022 for its strong winds, relatively shallow water and proximity to the Latrobe Valley's grid infrastructure — though it is considered unlikely all nine will bid this round. The auction closes in August 2027, with contracts awarded in 2028.
The clock behind it
The timetable matters because of what is leaving the grid. Yallourn power station in Gippsland is scheduled to close in July 2028, with NSW's Eraring to follow in April 2029, and the market operator warns coal plants could close faster than forecast. Demand is moving the other way: AEMO says that by 2036, data centres will draw almost as much power from the grid in a decade as every household in NSW and Victoria uses today. That is the supply gap this auction is meant to help fill.
Victoria's targets climb steeply: at least 2 gigawatts of offshore wind by 2032, 4 by 2035, and 9 by 2040. The state's auditor-general warned in December that Victoria was unlikely to reach its offshore wind target, citing delays in establishing the sector — which makes the auction's opening less a victory lap than a race against its own deadline.
The timing carries one further irony that needs no embellishment: the auction meant to help replace Yallourn's power opened the day before One Nation stages its formal energy-policy launch at Yallourn itself, promising a return to coal. Victorian energy policy, from opposite directions, has picked the same week to make its case.
