Australia's first offshore wind farm, an $8 billion 2000 megawatt project, has secured financial backing from a major international green energy investment fund.
Offshore Energy has joined with Danish fund management group Copenhagen Infrastructure Partnership to develop the renewable energy project.
The offshore wind farm, dubbed the Star of the South, will be built 10 to 25 kilometres off the coast of Victoria's Gippsland region, in the Bass Strait, and could provide one and a half times the energy of the now-closed Victorian Hazelwood coal-fired power station.
Offshore Energy managing director Andy Evans told Fairfax Media the partnership would transform the company and lift the viability of offshore wind for Australia.
This project also marks CIP's first venture into the Southern Hemisphere. CIP has more than ???5 billion ($A7.79 billion) under management and invests in renewable energy projects.
Mr Evans declined to say how much CIP had invested in the project but described it as ''long-term serious investment for the life of the project''.
"Star of the South offers a unique opportunity within offshore wind in a new market," CIP senior partner Torsten Lodberg Smed said.
"We are very satisfied with this partnership, and look forward to contributing our competence and experience in cooperation with Offshore Energy, all levels of government and key stakeholders in the development of the first offshore wind project in Australia."
Offshore Energy said Star of the South would comprise up to 250 turbines over an area of 574 square kilometres, and generate 8000-gigawatt hours of energy annually, enough to power 1.2 million homes, and account for nearly 20 per cent of Victoria's energy demand.
Mr Evans said offshore wind provides constant generation compared to onshore wind, providing increased electricity security.
"When placed in the right wind conditions like those off the coast of Gippsland, offshore wind delivers a high, consistent flow of electricity," he said.
It aims to begin energy generation as early as 2024.
Now Offshore Energy has secured financial support, the focus would be obtaining its final exploration licences from the Commonwealth government to fully map the offshore area, analysing specific wind patterns using floating laser measurement technology, Mr Evans said.
Feasibility studies will be carried out in the second half of 2018.
There is unlikely to be a listing for the company in the medium term, Mr Evans said.
CIP typically carries out long-term investments and is more likely to hold its position in Offshore Energy.
The partnership with Offshore Energy brings CIP's total offshore wind farms under management to three, including the 664 megawatt Beatrice project in Scotland, and the 402 megawatt Veja Mate project off Germany's coast, in the North Sea.
Star of the South is currently Australia's only offshore wind project.
"The industry doesn't really exist at the moment," Mr Evans told Fairfax Media.
He said there is currently a greater focus on solar and onshore wind projects in Australia, as they are currently cheaper than offshore wind, however, "the cost of offshore will come down, and has already seen falling costs in Europe."
However, it is not Australia's only offshore renewable energy project in development.
There are a number of wave energy projects currently underway around the nation's coast. Wave Swell Energy is one wave energy generator that is also using the Bass Strait as its testing grounds.
The group is carrying out commercial validation of its technology off King Island, in the Bass Strait.
It has signed an offtake agreement with Hydro Tasmania for an initial 200-kilowatt trial unit, and will operate during 2018 after its initial funding goals are reached.