First Australian offshore wind tender stalls in new blow to sector
Key state of Victoria won't now launch September auction for power from projects including CIP trailblazer Star of the South
Australia’s offshore wind ambitions suffered a new blow as pioneer state Victoria put the country’s first auction on hold.
Victoria was in September due to kick off a tender for power from wind farms in the Gippsland offshore wind zone, which in 2022 was the first to be formally sanctioned for development by the Australian government and contains up to 25GW of potential deployment.
But state energy minister Lily D’Ambrosio told an industry event today that the process would now be put on hold, citing factors including a lack of a funding agreement with the federal government, delays to plans for a key port and global uncertainty in the offshore wind sector.
A further announcement over plans for the auction will be made by the end of the year, Ambrosio said, in a setback for a state that has led Australia’s offshore wind charge.
Projects advancing in the Gippsland zone include Star of the South, Australia’s 2.2GW trailblazer that is backed by global developer Copenhagen Infrastructure Partners (CIP) and is one of 11 projects to get feasibility licences in the region.
Charles Rattray, CEO of Southerly Ten, the CIP-led developer advancing Star of the South, which is due to be Australia's first in the water, said: “While this is disappointing, it does not change the reality that offshore wind is essential to Australia’s energy future.
“With 90% of coal-fired capacity forecast to retire by 2035, offshore wind energy is needed to ensure energy security, price stability and a pathway to net zero.”
Ambrosio said Victoria – which plans to award developers deals based on a contracts for difference (CfD) mechanism – suffered disruption to its timelines when original plans for a renewable energy terminal at the Port of Hastings were rejected on environmental grounds.
However, uncertainty over funding arrangements with the Australian government combined with general jitters in the global sector appear to be at the heart of the decision.
The Victoria tender halt is the latest setback in the Australian offshore wind sector, seen as one of the world’s most promising markets but one that has been hit by the backwash from global forces buffeting the industry.
Australian energy minister Chris Bowen said then: “Offshore wind is facing some global international investment headwinds right at the moment, partly driven by some uncertainty out of the United States. So, we are caught up in that. So, that's very disappointing.”
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