Federal Climate Change and Energy Minister Chris Bowen made the announcement on Wednesday, saying the decision to cut the area of the Southern Ocean wind zone followed extensive consultation with local leaders, industry and community groups.
The final area of the zone, to be located about 15km to 20km off Victoria's coast, would span 1030 sq km rather than the initially planned more than 5000 sq km, Mr Bowen said in a joint release with Victorian Energy and Resources Minister Lily D'Ambrosio.
The zone would no longer take in an area off South Australia's coast, and the significant reduction accounted for the area's environmental, cultural heritage and economic significance, the ministers said.
"The Southern Ocean offshore wind zone has the potential to create thousands of new, high-value jobs and help secure cleaner, cheaper more reliable energy for regional Victoria," Mr Bowen said in a statement.
The wind zone was slated to work around the Bonney Upwelling, Deen Maar Island and shipping routes.
It was the third officially declared offshore wind zone in Australia and would bring 1740 jobs to Portland and surrounds during construction, as well as 870 ongoing operational jobs, the ministers said.
The zone was expected to generate up to 2.9GW of offshore wind energy - enough to power more than two million homes.
It was originally slated to be able to produce 14.6GW.
"Victoria is leading the way in offshore wind, with the first wind zones in the country declared off the coast of Gippsland and the southwest coast," Ms D'Ambrosio said in a statement.
"This is another step closer to delivering our target of at least two gigawatts of offshore wind energy by 2032 and will also help us get to net zero by 2045."
The decision to significantly reduce the size of the wind zone followed lobbying from environmental groups, who posed concerns about marine life.
Feasibility licence applications for offshore wind projects in the zone are expected to close on July 2.
10°C