Victoria’s renewables push suffers major blow as developers bail

Victoria’s timeline for offshore wind has been dealt a major blow after the government pushed back an auction process until next year.

Energy Minister Lily D’Ambrosio on Tuesday told the APAC Wind Energy Summit in Melbourne that the government would delay the auctions, due to start this month, with a new timeline to be announced by the end of 2025.

The auctions involve developers bidding for government support packages to help get their offshore wind projects over the line and are crucial to getting the industry up and running.

Victoria has set a goal of having two gigawatts of offshore wind by 2032.

News of the delay comes just days before the Albanese government is expected to announce its 2035 emissions target and after multiple potential developers of offshore wind farms pulled out or paused their involvement in the process amid financial concerns.

The Allan government is also seeking federal funding for the support packages, which would include subsidising offshore wind generators to back up their investment decisions.

However, this remains a key sticking point between the two governments, with both sides yet to agree on their share of funding and concerns the support packages could cost billions over their lifetime.

D’Ambrosio said she had been told by the industry that they needed more time because of uncertainty over funding.

“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,” she said.

D’Ambrosio said Victoria had lost 12 months from its original timeline due to issues with feasibility licences, finalising regulations and the initial rejection of an offshore wind construction hub at the Port of Hastings.

“In addition to that, we are very conscious of changes in the international market and supply chains that need to be factored into our planning,” she said.

“To be clear, what I am announcing today is not an end to Victoria or Australia’s offshore wind aspirations … we are absolutely committed, and I continue to be optimistic about the possibilities of a national partnership.”

D’Ambrosio said it was “tremendously challenging” for a state government to set up an offshore wind industry alone and called on the Albanese government to provide more support.

“The Commonwealth has a critical and large role to play, and it needs to be more than has been delivered to date,” she said.

“I am optimistic by nature. You don’t achieve something as complex as the energy transition by being a pessimist ... so I remain absolutely confident that we will achieve that necessary partnership with the federal government.

“Offshore wind is critical to the nation’s energy security and pushing down energy bills for Victorian families, and we continue to engage with the Commonwealth on renewable energy projects, including a timeline and support package to deliver Australia’s first offshore wind auction.”

A spokesman for federal Energy Minister Chris Bowen said the Commonwealth was committed to an offshore wind industry in Victoria and Australia.

“Just today we’ve announced relief from fees and red tape to provide long-term, sustainable support for the emerging industry across the nation,” he said.

D’Ambrosio said a port to construct turbines was essential and the government remained focused on getting the Port of Hastings project approved.

She said this would give investors certainty before the auction process began.

Spanish developer Bluefloat Energy pulled out of its Gippsland wind project in July while another $8 billion proposal from Origin has been paused.

Southerly Ten chief executive Charles Rattray was disappointed by the news but said offshore wind remained essential to Australia’s energy future.

His company is behind the proposed Star of the South wind farm in Gippsland, Victoria’s most advanced offshore wind project.

“With seven years of development work behind us on Star of the South, we know Gippsland has some of the world’s best offshore wind conditions – we are ready to deliver and harness this untapped resource for Australia,” Rattray said.

“We will continue to engage constructively with government, industry partners and communities to unlock the full potential of offshore wind for Australia.”

Clean Energy Council general manager of offshore wind Morgan Rossiter said it was critical that developers with licences in the Gippsland area have access to support packages for the first two gigawatts of power.

“We need all governments, both state and federal … co-invest and provide investors long-term certainty to help kickstart this vital industry.”

Opposition energy spokesman David Davis said the government’s offshore wind strategy was in tatters.

“Victorians are at increasingly greater risk of shortfalls of electricity [and] this is entirely due to the ideological decisions of a tired, 11-year-old government,” he said.

“Industry is entitled to predictability and certainty, but Labor both federal and state are not providing that.

“These huge investments will not be made on a wing and a prayer from Lily D’Ambrosio.”

Victorian Greens spokesperson for the energy transition, Dr Tim Read, said the government couldn’t continue to the blame the market if it wasn’t going to spend enough of its own money.

“We’re in a climate emergency and there’s no excuses for Labor delaying the clean energy transition. They could fund offshore wind, they’re just choosing not to,” he said.

“If only these were submarines, they’d be funded in an instant. But Labor doesn’t seem to think it’s worth it to invest in protecting Victoria’s life and ecosystems.”

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