A consortium led by AGL Energy has ceased feasibility studies for the Gippsland Skies offshore wind project and is set to relinquish its feasibility licence for the proposed 2.5 GW development off the coast of Victoria’s Gippsland, according to Australian media reports. This marks the third project in the Gippsland area to be abandoned this year.
The consortium, which includes Mainstream Renewable Power, Reventus Power, and DIRECT Infrastructure alongside AGL, announced the decision to stop feasibility studies for an offshore wind project off Gippsland.
A federal feasibility licence for the 2.5 GW project was granted in May 2024 after a competitive assessment within the Gippsland offshore wind zone.
Initially, the project was expected to operate in multiple phases, with the first phase commencing in 2032. It aimed to help achieve Victoria’s offshore wind targets, including at least 2 GW by 2032.
Gippsland Skies’ withdrawal follows two previous project abandonments in the region this year. BlueFloat Energy halted its Gippsland Dawn project in July for commercial reasons, and RWE stopped its 2 GW Kent project in October due to cost and regulatory issues. Additionally, a joint venture by Origin Energy and Renewable Energy Systems (RES) paused its 1.5 GW Navigator project in September.
Reports indicate that AGL and its partners chose to halt the project, reallocating capital to alternatives promising clearer immediate returns, such as grid-scale battery investments and other onshore renewable projects.
In 2022, the federal government designated Gippsland as Australia’s first offshore wind zone with a potential of 25 GW of renewable energy, granting feasibility licences to twelve projects last year.
In September, the Victorian government delayed its first offshore wind auction, originally planned for that month, citing reasons such as setbacks in feasibility licence approvals and global uncertainties.
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