Victoria: declared renewable energy zones and the first offshore wind auction

Two developments have changed the Victorian development picture: the formal declaration of renewable energy zones under the Victorian planning framework, and the opening of Australia's first offshore wind auction in August 2026.

Declared renewable energy zones

The Victorian Government has declared five onshore renewable energy zones, being South West, Central Highlands, Gippsland, Western and North West, together with the Gippsland Shoreline Renewable Energy Zone, which is intended to host the underground cables connecting offshore wind generation to the grid. Consultation is continuing on a sixth onshore zone, Central North.

The declarations are made under orders that attach obligations to development inside a zone. Solar, wind and battery developers are required to meet government expectations for community engagement and to deliver social and economic benefits. For a developer, those are not background policy statements. They are conditions that need to be reflected in project programmes, budgets and, eventually, in construction and community benefit contracting.

VicGrid, working with the Department of Energy, Environment and Climate Action, is responsible for the planning that sits behind the zones. The 2025 Victorian Transmission Plan set the current framework, and the 2027 plan is to take a twenty five year outlook. A separate Victorian Access Regime applies to connection and access within the state.

The offshore wind auction

Australia's first offshore wind auction opened on 26 August 2026. The request for proposals stage covers the delivery of two gigawatts of offshore wind across two declared offshore wind zones, being Bass Strait off Gippsland and the Southern Ocean off western Victoria.

Successful developers are to be supported by a contract for difference, together with an availability payment once the infrastructure is generating. Bids are to be assessed on value for money, deliverability, and benefits for local workers, businesses and communities. The request for proposals stage is expected to run for around twelve months, with contracts targeted for award in 2028.

What the two have in common

Both move assessment forward in the development timeline. A declared zone attaches engagement and benefit obligations before a project is consented. An auction assessed on deliverability requires a bidder to demonstrate, at bid stage, that land, connection, supply chain and construction pricing are credible.

The practical consequences are contractual:

• Land and tenure documents need to survive a long assessment period and a layout that is not yet final.
• Connection work for offshore projects runs through the shoreline zone, which introduces a cable corridor with its own tenure, approvals and interface issues.
• Community engagement and benefit commitments made at bid stage become obligations to be performed, and generally have to be passed through to contractors.
• Contract for difference terms interact with any other offtake a project may have, and with what a financier will accept as contracted revenue.
• Bid documentation is prepared under a timetable set by the auction, not by the project, which compresses diligence on everything underneath it.

Sources

• VicGrid, Renewable energy zones
• VicGrid, Victorian Transmission Plan
• Victorian Government, Offshore Wind Energy Victoria