There is still a future for offshore wind in Australia after the energy source's latest stumble, with an $8 billion wind farm off the coast of a key energy region put on ice.
Staff have been let go and operators have signalled their reluctance to bid for government funding to build 110 turbines off the coast of Victoria's Gippsland as part of the Navigator North project, located about 38 kilometres from tourist hotspot Lakes Entrance.
It's the latest in a string of delayed or cancelled wind projects nationally, with the state government's renewable energy strategy relying on wind as a key source of energy as coal power stations are switched off.
The Gippsland project was meant to be able to power the equivalent of one million homes, but the companies behind it have revealed they don't plan to bid for government funding that would have allowed it to open as planned in 2032.
AAP has been told five staff members have been let go from the joint venture between Origin Energy and renewable energy company RES and other workers have been redeployed.
An Origin spokesperson said a final decision was yet to be made and development would continue as the company awaited details on future funding rounds.
Six zones off NSW, Victoria and Western Australia are designated zones for offshore wind farms but none have yet been built, with more than one-10th of the nation's energy created by land turbines.
There was still clear support for offshore wind at the state and federal levels despite the pause, Climateworks Australia Country lead Anna Malos said.
As it was the first of its kind in the nation, she said it was about understanding what needed to happen for it to work.
"It's a novelty, which means things tend to be a bit slower, a bit more expensive," Ms Malos told AAP.
The $10 billion Gippsland Dawn project was shut down over shareholder concern about the industry's viability in recent months and the Novocastrian Offshore Wind Farm off Newcastle is also in doubt.
Ms Malos said renewable projects within Australia and globally were competing against a huge uptick in interest, which included financing, skills and workforce.
"Finance and projects tend to be attracted to places where those kind of projects are already up and running," she said.
"It is more a question of when, rather than if. I still think there's great potential."
Internationally, though, offshore wind farms are on the decline and the United States government has reversed approvals for some already being built.
Victoria has a target of 65 per cent renewable energy by the end of the decade and government figures revealed it had reached almost 38 per cent by July 2024.
A state government spokesperson said it would continue to work with the federal government to support Australia's first offshore wind industry, which it deemed "critical to the nation's energy security and pushing down energy bills".
Opposition energy spokesman David Davis said the latest development was a blow to Victoria's offshore wind targets.
"Offshore wind generation can potentially play a significant role in Victoria's energy mix, but the rollout has been botched by Labor," he said.
The federal government is set to unveil its 2035 emission reduction target in coming weeks.
