Posted on August 31, 2026
In long-awaited news for the offshore wind industry, the Victorian government has officially opened its offshore wind auction.
Energy Minister Jaclyn Symes opened the Request for Proposal process for the state’s first two gigawatts (GW) of offshore wind.
This will provide enough energy to power about 1.5 million homes each year.
“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.
But what does this actually mean and why is this important?
The auction explained
Auctions might bring to mind dozens of property buyers jostling to secure a piece of property on a Saturday morning.
In a similar vein, offshore wind proponents will now bid for government support to help deliver their projects.
The government will assess each bidder based on their ability to deliver on power, and also on value for money.
Successful bidders through the auction will win contracts through what is called the Energy Services Entry Mechanism (ESEM).
The ESEM is a recommendation by the federal Energy Department to encourage new investment in the energy sector.
To secure investment, renewables projects need to show they are going to make money over the course of their life span, which can be decades.
But energy buyers aren’t willing to sign deals that far into the future.
The ESEM bridges the gap by providing long-term contracts to reassure the investors that there will be a buyer for the power it produces in the later years of its life span.
But the ESEM isn’t in place yet and while nearly all Australian energy ministers agreed last year in principle to introduce it, Queensland remains opposed.
