Victorian offshore wind auction opens with plans to power 1.5 million homes

The Victorian government has opened its first offshore wind auction, inviting companies to bid to supply the first 2 gigawatts (GW) of power to the grid.

The auction is expected to deliver enough electricity to power 1.5 million homes each year and create thousands of jobs.

Successful applicants will receive government support to deliver their projects.

Victoria is home to Australia's first declared offshore wind zone in waters off the Gippsland coast and another off the state's south west coast near Warrnambool.

Bidding in the auction is now open and will close in August next year.

The Victorian government said it expects to award contracts in 2028, allowing successful projects to move towards securing investment, construction and operation.

The auction was planned last year, but was delayed while the state and federal governments worked on the timing.

Energy Minister Jaclyn Symes said offshore wind would deliver reliability to the grid as Victoria's coal plants close.

"This auction is a giant leap towards getting Australia's first offshore wind projects built, attracting billions in investment, creating thousands of jobs and delivering the reliable power we need as coal retires," Ms Symes said.

"Victoria has some of the best offshore wind resources in the world. This auction is about harnessing that advantage and building the next generation of energy right here in Victoria."

The government will assess bidders based on their value for money and ability to deliver benefits for local communities.

Victoria has a target to produce at least 2 GW of power from offshore wind by 2032, increasing to 4 GW in 2035 and 9 GW in 2040.

The government expects offshore wind to create thousands of new jobs.

Auction welcomed by industry

Offshore wind developer Southerly Ten has welcomed the opening of the auction, saying it was "really good news" for the industry.

"It's really the signal that government is looking to bring offshore wind into the market and we know that's really important as some of the coal plants start to retire over the coming decade," chief development officer Erin Coldham said.

"One of the things that's really critical to make sure that offshore wind projects can proceed is to have that partnership with government through these types of contracts."

Southerly Ten is the developer of the 2.2 gigawatt (GW) Star of the South, which is Australia's most advanced offshore wind project.

Ms Coldham said the company would review the auction documents before deciding whether to bid.

"We've been working very hard over a number of years to get all of the approvals ready, and this is really the next step for us to participate in this process, see what the government is seeking and take the project forward from there," she said.