Developers of an $8 billion offshore wind farm, slated for the Gippsland coast in Victoria, say they will continue to work on the project, but it will not be ready for the first round of state auctions.
The Navigator North offshore wind farm, backed by Origin and RES, is a 110-turbine farm planned offshore in the Gippsland wind zone.
The 1.5 gigawatt project promises to deliver power to more than 1 million homes and 200 jobs if it is successful.
It was one of 12 projects awarded a feasibility licence by the federal government in 2024, but its future is now in doubt.
A spokesperson for Origin and RES said it would not participate in a Victorian government auction, which would award successful projects state support, due to an inability to meet timelines.
The companies said they were still working on the project and would target future auctions.
But questions remain over the industry, with the announcement coming just months after another proponent, BlueFloat Energy, withdrew from its offshore wind projects in Australia and internationally.
Energy experts have now warned that unless the state and federal governments expedite the rollout of the industry, other investors and suppliers might follow.
Tony Wood says the offshore wind industry is being impacted by delays. (ABC News)
Grattan Institute senior fellow for energy and climate Tony Wood said the announcement was not surprising.
“I think the whole process is taking a lot longer and turning out to be more expensive than maybe it had been anticipated,” he said.
What is the offshore wind auction?
As part of the rollout of the state’s proposed 2 GW offshore wind industry, the government needs to call an auction process.
The developers behind the 11 proposed offshore wind farms will bid for government support packages to help build their projects.
Eleven proponents remain in the Gippsland Offshore Wind Zone. (Supplied: DCCEEW)
Victorian Energy Minister Lily D’Ambrosio released an energy implementation strategy in April, indicating the auction process would start in September, but is yet to make an announcement.
Mr Wood said a key sticking point was a lack of clarity on the share of funding the state and federal governments would provide.
“Between the federal government and state government, there’s still no clarity around how that’s going to work,” he said.
“So you can see that means projects get pushed back in time and go up in costs.”
Bruce Mountain says offshore wind will need significant government investment. (ABC News: Peter Garnish)
Professor Bruce Mountain, from Victoria University’s Energy Policy Centre, said more developers might follow suit and pause their projects.
“I don’t think it will be the last,” he said.
“There were quite a few competitors for Gippsland wind.
“The Victorian government set very big targets of the amount of offshore wind capacity it would like to see, but it has no real ability to make sure those targets are met, even though they exist in law.”
The Victorian government has a renewable energy target of 40 per cent this year, increasing to 95 per cent by 2035.
That includes at least 2 GW from offshore wind by 2032.
Nationally, Australia has a target of achieving 82 per cent renewable energy by 2030.
Professor Mountain said it was looking increasingly unlikely those targets would be achieved without significant investment from the federal government.
“The current government simply lacks the resources to be able to fund that amount of new capacity coming in,” he said.
“So it all depends on the federal government support, and there’s a lot of competing claims on federal government support for energy transition.”
Need to keep momentum
Despite the lag in regulations and approvals, some proponents remain positive about the outlook for offshore wind.
Charles Rattray says he remains optimistic about the future of the offshore wind industry. (ABC News: Tavleen Singh)
Southerly Ten CEO Charles Rattray, the developer behind the state’s most progressed offshore wind farm, Star of the South, said a clearer auction process would give the industry much-needed certainty.
“What we would like to see is the momentum in the industry to be gained by the launching of this first auction,” he said.
“In addition, we would like there to be subsequent auctions, because investors and suppliers and employees and skills all like to see certainty for an industry, and what that means is multiple sequencing of auctions to deliver the scale we need.”
In a statement, a Victorian government spokesperson said it would continue to work with the federal government to deliver offshore wind.
“We continue to work with the Commonwealth government on support for Australia’s first offshore wind industry, which is critical to the nation’s energy security and pushing down energy bills for Victorian families,” the spokesperson said.
A spokesperson for federal Climate Change and Energy Minister Chris Bowen said the Gippsland wind projects were key to the nation’s energy landscape.
“The number of projects in the Gippsland zone is a testament to the work put into establishing the industry, and the great renewable capacity off our shores,” the spokesperson said.
