Another Developer in Australia Drops Offshore Wind Project

A consortium led by AGL Energy has discontinued feasibility studies for the Gippsland Skies offshore wind project and will surrender its feasibility licence for the proposed 2.5 GW development off Victoria’s Gippsland coast, Australian media reports. The move makes this the third project in the Gippsland zone to be abandoned this year.  

The consortium, which includes Mainstream Renewable Power, Reventus Power and DIRECT Infrastructure alongside AGL, reportedly said the Gippsland Skies joint venture had “made the decision to discontinue feasibility studies for a potential offshore wind project off the coast of Gippsland.”

The 2.5 GW project was awarded a federal feasibility licence in May 2024 after a competitive assessment of applications for the Gippsland offshore wind zone.

The project, described earlier as consisting of multiple phases with the first phase operational in 2032, was one of several proposals aimed at meeting Victoria’s targets for offshore wind, including at least 2 GW by 2032.

The Gippsland Skies withdrawal follows two earlier abandonments in the same region this year, as well as one project that has been paused.

In July, BlueFloat Energy shelved its Gippsland Dawn floating offshore wind proposal, saying the project was no longer commercially viable, and RWE ceased development of its 2 GW Kent project in October, citing cost pressures and regulatory and auction uncertainty. In September, the joint venture between Origin Energy and Renewable Energy Systems (RES) said that it had put a hold on its 1.5 GW Navigator offshore wind farm.

Media reports quoting the Gippsland Skies consortium said AGL and partners determined the project would be halted and that AGL would shift capital toward alternatives it judged to have clearer near-term returns. The company pointed to priorities such as grid-scale battery investments and other onshore renewable and firming projects.

In 2022, the federal government declared Gippsland as Australia’s first offshore wind zone, with the potential to deliver 25 GW of renewable energy, and awarded twelve projects with feasibility licences last year.

In September this year, the Victorian government postponed its first offshore wind auction, which was originally set to launch that month, saying the decision to delay the auction was due to several reasons, including setbacks in the approval of feasibility licences, the rejection of the initial referral for the Port of Hastings, and global uncertainty.

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