Energy company AGL has abandoned plans to develop the Gippsland Skies offshore wind project in Victoria. It is the third company this year to do so in the Gippsland zone, which hosts Australia’s first offshore wind cluster. AGL’s abandonment of its 2.5 GW project is raising fears about whether Victoria will meet its offshore wind target. AGL said it would be focusing ‘on other projects’.
The Victorian government is expected now to outline plans for an auction which would allow project proponents to bid for government support.
Gippsland Skies was one of 11 projects granted a feasibility licence by the federal government in the Gippsland offshore wind zone. “AGL will prioritise options in its development pipeline of onshore wind, batteries, pumped hydro and gas firming projects,” a company spokesperson said.
The Gippsland Skies project was in the early feasibility stage when the decision was taken. It is believed that AGL’s decision was influenced by ‘challenges faced by offshore wind globally, including in the United States’.
Gippsland Skies is the third Gippsland offshore wind project to be abandoned. In October, German company RWE abandoned its plans to develop the 2GW Kent offshore wind farm. That followed BlueFloat Energy’s decision in July to scrap the $10 billion Gippsland Dawn project, which had received major project status from the federal government in November 2024. At the time, BlueFloat said it was not commercially viable to invest in the sector.
Victoria’s targets
The Victorian government has set a target to produce at least 2 GW of power from offshore wind by 2032. But a report from Victoria’s auditor general has been tabled in state parliament which warned that the state was unlikely to reach the target.
Victoria was due to hold an auction to allow offshore wind proponents to bid for government support, but in September, Victorian Energy minister Lily D’Ambrosio announced that the state would not announce plans for the auction until at least the end of the year.
Opposition energy spokesperson David Davis said the offshore wind roll-out had been mismanaged. “Last week the auditor general made it clear that offshore wind targets in Victoria would not be met, and he pointed to the risk of energy transition becoming disorderly,” Mr Davis said.
