Victoria Greenlights 6 Projects for Australia’s First Offshore Wind Farms

Wind turbines are pictured during the installation of the RWE Offshore Wind farm Kaskasi off the coast of the north German Island of Helgoland on March 23, 2023. Christian Charisius/AFP via Getty Images

Feasibility licences have been granted for several wind farm projects to get underway off Victoria’s coast as part of the state’s energy transition away from coal-fired power stations.

So far, licences have been granted to six projects, namely the Star of the South, High Sea Wind, Gippsland Skies, Blue Mackerel North, Kut-Wut Brataualung, and Orsted’s Gippsland.

The new zone is expected to produce 2.9 gigawatts (GW) which is enough to provide power to 2,000 Victorian households, but is significantly lower than an earlier estimate of 14.6GW.

The government is aiming for an increase to 4GW by 2925, and 9 GW by 2040.

Energy Minister Chris Bowen said six more licences will be granted following consultation with traditional owners. If all granted licences, these projects would be enough to eventually produce 25GW—more than the state requires.

“Even just some of that potential will make a substantial contribution to filling the gap left by coal in Victoria and across the NEM (national electricity market),” Mr. Bowen said.

The next step for these developers is to obtain a commercial licence for the building and operation of the farm—another process that can take up to seven years.

“It will rightly be some time before the projects I’m announcing today receive the final tick,” Mr. Bowen said.

The announcement comes after an area of the Bass Strait off Gippsland was announced in December 2022 as the first zone that would be utilised by wind farming.

Offshore wind farms utilise undersea cables to harness and transport energy generated by multiple sea-based wind turbines to a grid. These turbines are much larger than their onshore counterparts to capture the stronger and more consistent offshore winds.

Mr. Bowen said the projects would be “energy rich and jobs rich,” with the potential for 15,000 new construction jobs half as many for ongoing work.

“That’s why major Australian energy users—from Alcoa in Portland to Bluescope in the Illawarra, to Tomago in the Hunter—say that offshore wind is vital to their energy future,” he said.

Australian Minister for Climate Change and Energy Chris Bowen speaks during the Sydney Energy Forum in Australia on July 13, 2022. Jaimi Joy - Pool/Getty Images

Joint Victoria-South Australia Tender

A Victoria-South Australia tender to provide an additional 600MW of capacity by 2030 was also put out for tender, under the Capacity Investment scheme.

Under the scheme, renewable projects must be located in South Australia or Victoria; have a minimum storage duration of two hours and a minimum capacity of 30MW and aim to deliver “clean, dispatchable capacity to the electricity grid before the end of 2027.”

Mr. Bowen said an overwhelming subscription of bidders showed “exceptionally strong investment appetite plus industry confidence” in the scheme.

Selected projects will get a guarantee of government investment.

“If a project is successful, they will get an agreement that lasts up to 15 years, called a Capacity Investment Scheme Agreement (CISA). This agreement will provide the investment certainty needed to ensure their dispatchable renewable energy project can happen,” Mr. Bowen said in a joint media release in October 2023.

Environmental Impact of Wind Zones

In March, a planned offshore wind zone off Victoria’s coast was approved at only one-fifth of the size originally planned after community groups and environmental lobbyists voiced their concerns about the impact on marine life.

The 1,030 square kilometres (397 square miles) wind zone will be located 20 kilometres off the Western Victoria coast at Warrnambool and Port Fairy.

The works around were originally planned to stretch from Warrnambool in Victoria up to Port MacDonnell in South Australia, around the Bonney Upwelling, Deen Maar Island, and shipping routes, taking in an area of more than 5,000 square kilometres.

The South Australian government, however, was not sold on the idea of the power generated by the grid being used exclusively in Victoria.

They also held concerns about the impact on their rock lobster industry, and the objections resulted in the area being reduced.