Victoria’s energy transition in strife as ‘essential’ offshore wind hub refused

A blindsided Victorian government is scrambling to meet its offshore wind target timeline after the federal government rejected a new terminal at the Port of Hastings, with project documents showing the decision could throw the state’s energy transition into disarray.

Environment Minister Steve Dimopoulos on Monday said the state was undeterred and would consider next steps after his federal counterpart, Tanya Plibersek, refused Commonwealth approvals for the Victorian Renewable Energy Terminal – a proposed hub for offshore wind farm construction south-east of Melbourne – over concerns of breaching international guidelines.

The decision has left Victoria trying to ensure it can meet its legislated targets of building 2 gigawatts of offshore wind by 2032 and nine gigawatts by 2040. Applications for state environmental approvals submitted by the state-owned Port of Hastings show the swift development of the project was critical to this goal.

“The expeditious development of this project is essential to meet the Victorian government’s offshore wind targets,” the application says.

“If port facilities are not available to support the offshore wind industry in time for the development of the first offshore wind farm, growth in Victoria’s offshore wind sector will be curtailed due to a lack of suitable port infrastructure. Further, delays in port upgrades will lead to constraints for offshore wind developers, ultimately reducing the volume of renewable energy generated through offshore wind compromising Victoria’s clean energy milestones.”

There is no right of appeal to Plibersek’s decision, which means Victoria would have to take the matter to court and argue a legal error to have it overturned. The port could also submit a new application for a revised or alternative project for assessment.

There are currently no ports in Victoria suitable for offshore wind construction. The Allan government chose the Port of Hastings after rating it significantly higher than alternatives, citing “major strategic and competitive advantages”.

In September, Victorian Energy Minister Lily D’Ambrosio wrote on social media that “Australia’s first offshore wind turbines will be built at the Port of Hastings”.

The Star of the South wind farm, currently the most advanced offshore wind proposal in the state, has nominated Hastings as its preferred construction port but is also assessing Geelong and Bell Bay in Tasmania for secondary construction.

The country’s first designated zone for offshore wind generators was declared by the Albanese government in 2022 to be in an ocean bed 20 kilometres off the coast of the Gippsland town of Golden Beach, with the Port of Hastings proposed as a base for the assembly of the wind farms.

The Port of Hastings was the Victorian government’s preferred site for a base for an offshore wind farm.Credit: Angela MacDonald-Smith

Plibersek knocked back the proposed port facility in Hastings on December 18, saying in her decision that the project was “clearly unacceptable” under national environmental law and could not proceed.

Australia is a signatory to the Ramsar Convention on Wetlands of International Importance, an agreement signed by more than 170 countries that pledges to promote the conservation of wetlands.

Plibersek argues in her decision that the terminal would threaten local marine, bird and plant life.

“The Victorian Renewable Energy Terminal Proposal project would have had unacceptable impacts on the internationally protected Western Port Ramsar Wetland,” a spokesperson for Plibersek said.

The project’s summary listed many potential impacts including loss of habitat for migratory birds, potential indirect habitat loss and changes to water quality. More than 10,000 waders and 10,000 ducks and swans visit the wetlands annually.

In Plibersek’s published statement of reasons, she said the impacts could not be adequately avoided and noted large areas of the wetlands would be destroyed or substantially modified.

“The proposed action is likely to cause irreversible damage to the habitat of waterbirds and migratory birds and marine invertebrates and fish that are critical to the ecological character of the Western Port Ramsar Wetland,” she said.

Plibersek also said dredging from the construction of the new facility would lead to a significant disruption to the tidal flows, which would “impact the deposition and movements of sediments and nutrients that in turn will impact the food webs of the mudflats and coastal area”.

Dimopoulos said on Monday the state government did not object to the federal environmental protection legislation process and would take some time to consider what the decision meant.

“We’re undeterred, we’ll digest the results of the decision and we’ll make [a decision] in relation to the next step,” he said.

Victorian opposition energy spokesman David Davis described the port veto as a “debacle”.

“Victoria’s offshore wind policy is now back to square one. How did Victoria, and specifically Energy Minister Lily D’Ambrosio not see this coming?” he said.

Port of Hastings community relations manager Todd Trimble said the corporation was considering its options and would provide an update in due course.

Mornington Peninsula Mayor Simon Brooks said Plibersek’s decision had surprised the council as it has been encouraging a better use of the land.

“It is disappointing, we’re really keen to broaden our economic base,” he said.

“We would really like to see some longer-term strategy that looks to encourage a clean green, innovative, value-add type of manufacturing that is linked to our transitioning into a lower carbon future.”

The total project area would have been 146 hectares and involved clearing vegetation, dredging and reclaiming the seabed for the wharf, which would be about 600 metres long by 100 metres wide.

Mel Barker, the chief executive of the Western Port Biosphere Foundation – an independent body promoting scientific protection of the wetlands – said it was a “tricky balance” because the group supported a transition from fossil fuels, but the impact on the environment would be too great for wetlands.

“There’s thousands of birds that migrate here each year … and they use those mud flats as a feeding ground,” she said.

Barker also said the wetlands had “world-class” carbon absorption from the mangroves, sea grasses and the salt marshes.

“We can see that’s got enormous climate benefits because they’re really effective at getting carbon so about 50 times more effective than a land-based forest,” she said.

Australian Pipelines and Gas Association chief executive Steve Davies also argued the “indefinite delays” to Victoria’s offshore wind program highlights the role natural gas should play in the future of energy.

“This decision highlights the importance of having multiple viable options for Australia’s future energy requirements,” he said.

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