Tuesday 15 September 2026
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Victorian offshore wind auction opens, targeting power for 1.5 million homes

State government says competitive process is a major step toward a local offshore wind industry

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By LineZotpaper
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The Victorian government has opened a competitive auction for offshore wind projects it says could power the equivalent of 1.5 million homes, describing the process as a major step toward establishing a local offshore wind industry as the state prepares for the closure of its coal-fired power stations.

The Victorian government has opened a competitive auction for offshore wind generation, saying the projects it supports could power the equivalent of 1.5 million homes and mark a major step toward building a local offshore wind industry.

The auction, announced on Tuesday, will allocate capacity to developers seeking to build and operate wind farms in Victorian coastal waters. The government said the process is designed to provide market certainty, attract investment, and support the state's shift away from fossil fuel generation.

Victoria has committed to 2 gigawatts of offshore wind capacity by 2032, rising to 9 gigawatts by 2040, under targets set by the state government. The auction is intended to deliver a substantial portion of that capacity, and follows the federal government's declaration of offshore wind zones off the Gippsland coast and in the Southern Ocean region.

The timing reflects the urgency of Victoria's energy transition. The Yallourn coal-fired power station is scheduled to close in 2028 and the Loy Yang A plant in 2035. Offshore wind, which generates more consistently than onshore wind or solar, is seen by the government as a key replacement source alongside battery storage and transmission upgrades.

Renewable energy industry groups have broadly welcomed the move, arguing that a competitive auction gives developers the revenue certainty needed to finance projects and develop a domestic supply chain. Potential investment extends beyond the turbines themselves to port upgrades, marine logistics and maintenance services, with the government pointing to economic opportunities for Gippsland and other coastal regions.

The auction also faces scrutiny. Commercial fishing groups have previously raised concerns about the exclusion of fishing grounds within declared offshore wind zones, and some coastal residents have questioned the visual and environmental impact of large turbine arrays. Energy analysts note that offshore wind remains more expensive per megawatt-hour than onshore wind and solar, and that delivery will depend on transmission infrastructure and grid connection timelines being met.

The success of the auction will also hinge on coordination between the Victorian government, which is managing the process, and the federal government, which regulates offshore wind areas and oversees environmental approvals. Both levels of government say they are committed to working together, though developers have complained about the complexity of the dual approval pathway.

Bidders will now prepare submissions ahead of the auction's closing dates, with successful projects expected to be announced in coming months.

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Analysis

Why This Matters

  • Offshore wind is central to Victoria's plan to retire its remaining coal-fired power stations (Yallourn in 2028, Loy Yang A in 2035) and replace that capacity with clean generation.
  • The auction's outcome will determine whether a local offshore wind supply chain — ports, manufacturing, marine services — materialises in Gippsland and other coastal regions.
  • As the first state-run offshore wind auction in Australia, it could set the template for how other states procure offshore capacity.

Background

Victoria's offshore wind ambitions date to 2022, when the state government legislated targets of 2 GW by 2032, 4 GW by 2035 and 9 GW by 2040. The federal government has since declared offshore wind zones off Gippsland (2024) and in the Southern Ocean, providing the regulatory framework for development. Victoria has separately been preparing port infrastructure and shortlisting feasibility licence proponents.

Tuesday's auction marks a shift from feasibility studies to formal capacity allocation. It is designed to give developers long-term revenue certainty, a prerequisite for the multi-billion-dollar investment decisions required to build offshore wind farms. The state's process runs alongside federal licensing and environmental approvals, adding complexity but also providing a dual path to project delivery.

Key Perspectives

Victorian Government: The auction is a major step toward a local offshore wind industry, promising jobs, energy security and progress toward renewable targets. Developers and renewable industry groups: They welcome the revenue certainty but argue success depends on timely transmission connections and streamlined approvals across state and federal processes. Fishing industry, coastal communities and energy analysts: Critics point to lost access to fishing grounds, visual and environmental impacts, and higher costs relative to onshore wind and solar. Analysts caution that delays in grid connections could undermine the auction's stated timelines.

What to Watch

  • The closing date for bids and how many projects — and gigawatts — the auction ultimately allocates.
  • Whether winning bidders reach final investment decisions within realistic timeframes.
  • Progress on grid transmission upgrades needed to carry offshore wind into the network.
  • How state and federal approval processes interact once projects move to construction.

Sources

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Articles published under the Zotpaper byline are synthesized from multiple source publications by our AI editor and reviewed by our editorial process. Each story combines reporting from credible outlets to give readers a balanced, comprehensive view.

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