The Victorian government has opened Australia's first offshore wind auction, inviting developers to bid for contracts to supply the state's first 2 gigawatts of offshore wind capacity — enough to power roughly 1.5 million homes. Bidding runs for one year, and contracts are expected to be awarded in 2028, according to a filing from the office of Victorian Energy Minister Jaclyn Symes reported by ABC News.
Gippsland's coast leads the way
The initial 2 GW target draws on Australia's first declared offshore wind zone in Bass Strait, off the Gippsland coast, with a second declared zone off the state's south-west near Warrnambool. Victoria has committed to at least 2 GW of offshore wind capacity by 2032, rising to 4 GW by 2035 and 9 GW by 2040. Successful projects will receive contractual support through the Electricity Services Entry Mechanism (ESEM), a revenue-underwriting scheme agreed in principle late last year by energy ministers across Australia except Queensland but not yet fully adopted.
Southerly Ten and Star of the South line up
The clearest early bidder is Southerly Ten, developer of the 2.2 GW Star of the South — Australia's most advanced offshore wind project, backed by Copenhagen Infrastructure Partners and Cbus Super. "It's really the signal that government is looking to bring offshore wind into the market," chief development officer Erin Coldham said, adding that Southerly Ten would review the auction documents in preparation for a submission. Star of the South is targeting first power in 2035, seven years after the Yallourn coal plant — responsible for 14.8% of Victoria's electricity last year — is scheduled to close.
A test for the ESEM
Grattan Institute energy program director Tony Wood called the auction "an important next step in what could be a very important process" for the grid, noting that offshore wind produces power roughly 50% of the time versus 30–40% for onshore turbines and complements other renewables when they are offline. Wood also warned that offshore wind is more expensive than onshore alternatives and that the mechanics of the ESEM remain to be finalised — a live question given the Australian Energy Market Operator has forecast data-centre demand alone will draw as much power as every home in Victoria and New South Wales combined by 2036. The auction sits alongside other large-scale renewables build-outs and grid-scale storage deals announced in Europe this week.
Reporting based on coverage from ABC News and Southerly Ten.