Victoria Sets August 2025 Date for First Offshore Wind Auction
The state of Victoria, Australia, has set August 2025 as the date for its first offshore wind farm auction, according to state Energy Minister Lily D’Ambrosio. This development occurs alongside a broader strategy to expand renewable energy generation, which includes fast-tracking over $9 billion in onshore projects, while facing challenges related to project timelines, community opposition, and the planned closure of coal-fired power stations.
Offshore Wind Auction and Timeline
The Victorian government has announced a request for tender to begin in August 2025 for 2 gigawatts (GW) of offshore wind capacity. The auction, initially planned for September 2024, was postponed due to uncertainties regarding port and transmission facilities and changes to the national energy market design. Minister D’Ambrosio stated that the design process is ongoing and will incorporate the proposed Electricity Services Entry Mechanism (ESEM).
State targets for offshore wind capacity are 2 GW by 2032 and 9 GW by 2040.
Star of the South Project Timeline
In a related development, the environmental effects statement (EES) for the Star of the South offshore wind farm, located in the Gippsland offshore wind zone in Bass Strait, indicates that full construction could extend to 2037—five years later than originally planned.
According to the EES—the first such statement submitted for an offshore wind project under Commonwealth and Victorian law—construction is expected to begin around 2030 if approvals are obtained in the next few years, with first power generation projected for 2032. Erin Coldham, chief development officer of developer Southerly Ten, stated the timeline is conservative to allow for potential setbacks but expressed confidence in the 2032 first-power target.
"The timeline is conservative to allow for potential setbacks, but we are confident in the 2032 first-power target." — Erin Coldham, Southerly Ten
Broader Renewable Energy Development and Fast-Tracking
Beyond offshore wind, the Victorian government has utilized the Development Facilitation Program to expedite approvals for 25 renewable energy projects since 2024, with a combined value exceeding $9 billion. Planning Minister Sonya Kilkenny approved these projects, which are projected to generate power for over 735,000 homes annually upon completion.
The program, expanded in 2024 from a COVID-era initiative, designates new renewable projects as significant economic developments to bypass planning panels and third-party Victorian Civil and Administrative Tribunal (VCAT) appeals. The accelerated approval process is estimated to take approximately four months. Recent approvals under this scheme include a 300-megawatt battery in Heywood and a 400-megawatt battery in Glenrowan.
Renewable Energy Progress and State Goals
Victoria’s renewable energy sources currently provide 22.6% of the state’s electricity generation, surpassing an internal 2025 target. The state’s legislated goal is 40% renewable energy. Other data indicates that in the last financial year, renewables accounted for 44.6% of generation. Rooftop solar contributed about 16% of state electricity last year, and wind farms generated approximately 24%. The state also has nearly 100 large-scale renewable energy projects in operation.
Victoria’s onshore renewables development pipeline totals just over 59 GW, which is among the smallest of mainland states. The state aims to add another 9 GW of offshore wind by 2040, with 19.6 GW in feasibility planning stages. Minister D’Ambrosio stated that Victoria requires an additional 25 GW of energy and storage by 2035 to meet its next target. The federal government has issued feasibility licenses for 4 GW of projects in Western Australia, but did not grant licenses for proposals in Bass Strait.
Challenges and Delays
Several challenges have been identified regarding the energy transition timeline.
- Coal Plant Closures: The Yallourn coal-fired power station is scheduled to close in 2028, and Loy Yang A in 2035.
- Auditor-General Report: A Victoria Auditor-General report from last year found it unlikely the state would meet its renewable energy targets due to delays.
- Auction Withdrawals: Several projects withdrew from a planned offshore wind auction last year, citing industry rollout delays.
- Community Opposition: The expansion of renewable energy projects and necessary transmission lines in regional Victoria has faced opposition from local communities, citing concerns about land use and consultation. VicGrid paused consultation on six proposed renewable energy zones due to recent bushfires.
- National Pace: The Australian Energy Market Operator (AEMO) states that 200 GW of additional capacity is needed to reach 2050 net zero targets. Data from RenewMap indicates approximately 670 GW of large-scale projects are in development, but the pace of delivery needs to accelerate.
"The state government underestimated challenges in transitioning from coal, and further delays could impact energy security." — Tony Wood, Grattan Institute
Statements from Stakeholders
- Grattan Institute: Senior fellow Tony Wood stated the state government underestimated challenges in transitioning from coal, and further delays could impact energy security, questioning the contingency plan.
- Mining and Energy Union: District vice-president Andy Smith expressed disappointment, stating workers at Yallourn face increased uncertainty.
- Energy Minister’s Office: A spokesperson for Minister D’Ambrosio stated Victoria is on track to deliver its offshore wind target and achieve 95% renewable energy generation by 2035.
- Developers: Charles Rattray, CEO of Southerly Ten, stated the Star of the South project has submitted environmental applications and acquired land for its shore crossing.
- Environment Victoria: The group highlighted the relevance of offshore wind given recent heatwaves and reliability issues with coal-fired stations.
- Climate Energy Finance: Director Tim Buckley commented that the development pipeline demonstrates capacity, but Australia needs to double the current speed and scale of development.