Victoria has officially launched the procurement process for its inaugural offshore wind projects, a significant policy move set to deliver 2 gigawatts (GW) of clean energy and potentially lower electricity costs for 1.5 million homes annually. The Request for Proposal (RFP) stage opened on 1 September 2026, marking a critical step in the state’s ambitious renewable energy transition as coal-fired generation phases out.
The Victorian government’s initiative aims to harness the abundant wind resources in Bass Strait and off the western coast of the state, with contracts for the initial 2 GW capacity expected to be awarded in 2028 following the auction’s close in August 2027. This forms the cornerstone of Victoria’s commitment to achieving at least 2 GW of offshore wind by 2032, escalating to 4 GW by 2035, and a substantial 9 GW by 2040.
Minister for Energy and Resources, Jaclyn Symes, highlighted the strategic importance of the tender. “Victoria has some of the best offshore wind resources in the world,” Symes stated. “This auction is about harnessing that advantage and building the next generation of energy right here in Victoria.”
Why Offshore Wind Matters for Your Power Bill
The introduction of large-scale offshore wind is projected to play a crucial role in stabilising and ultimately reducing electricity prices for Victorian households and businesses. Unlike solar generation, offshore wind can operate strongly during evening peak demand periods, and ocean winds typically offer greater consistency than onshore projects. This complementary generation profile is vital for maintaining grid stability as the state transitions away from less reliable, ageing coal infrastructure.
“The initial 2GW could generate enough electricity to power around 1.5 million homes annually, driving down power bills and creating thousands of new jobs.”
Renewables already contribute more than 45 per cent of Victoria’s total electricity generation, a factor that has helped deliver some of the cheapest wholesale power prices in the country. Adding further low-cost renewable generation is expected to sustain this downward pressure on energy bills. For households looking to further optimise their energy usage and savings, integrating such renewable sources with smart home systems and tariffs can be highly effective. Readers can explore options like Best Home Energy Management Systems in Australia 2026: Slash Bills by $1,000+ Annually for more information.
Economic and Environmental Impact
The development of this new industry is expected to attract billions in investment and create thousands of jobs, particularly in regional areas like Gippsland. The government’s plan outlines a focus on local content requirements and initiatives supporting the participation of women and First Peoples of Victoria in these projects.
Analysis by Jacobs for offshore wind developer Southerly Ten previously modelled the impact of 7 GW of Gippsland offshore wind operating by 2040. The study indicated that this scale of development could reduce the requirement for new onshore transmission by over 900 kilometres and negate the need for an additional 8.3 GW of onshore wind capacity in the National Electricity Market (NEM) by 2040.
Victoria’s Offshore Wind Targets and Impact
| Metric | Target / Forecast | Details |
|---|---|---|
| Initial Tender Capacity | 2 GW | Launched 1 September 2026 |
| Homes Powered Annually | ~1.5 million | From initial 2 GW capacity |
| Target by 2032 | At least 2 GW | Statutory target |
| Target by 2035 | 4 GW | Statutory target |
| Target by 2040 | 9 GW | Statutory target |
| Auction Close | August 2027 | For initial 2 GW capacity |
| Contracts Awarded | 2028 | For initial 2 GW capacity |
| Primary Location | Gippsland (Bass Strait) | Strong, consistent winds |
Grid Integration and Future Outlook
VicGrid, the state’s transmission network planner, is coordinating the necessary infrastructure development to connect these offshore wind projects to the grid, with connections planned to the Loy Yang Power Station switchyard. This strategic integration is crucial to manage the influx of new generation and ensure reliable power supply across the state.
The move towards offshore wind complements other renewable energy initiatives across Australia. As more states commit to ambitious clean energy targets, understanding the available support and pathways to reduce energy consumption becomes increasingly valuable. Australians seeking to capitalise on broader energy savings can refer to resources like Australia’s 2026 Solar, Battery & EV Rebates: Unlock Up To $20,000+ in Savings to learn about current government incentives.
The Victorian offshore wind tender represents a significant policy milestone, not just for Victoria but for Australia’s broader energy transition. By leveraging its natural advantages, the state is setting a precedent for large-scale renewable energy development that promises to deliver both environmental benefits and tangible economic relief to consumers.