Renewable targets dealt fresh blow as major Victorian offshore windfarm abandoned after energy giant failed to find buyer

Sky News AU

2 days ago

A significant Victorian offshore wind project has been scrapped after US-backed energy giant BlueFloat confirmed it had failed to find a buyer.
The company was reportedly mulling the sale of its Gippsland project off the Victorian coast in early July, with the development considered essential for meeting state and federal emission reduction deadlines.
BlueFloat Energy acquired a feasibility license late last year to construct the Victorian offshore wind facility, and further secured a preliminary development license to build an offshore wind complex in New South Wales off the Illawarra coast.
However, industry insiders told The Australian on Tuesday that after weeks of attempting to lock down a buyer, BlueFloat had failed in arranging the sale of the embattled development.
Victoria, which stands as one of Australia's most fossil fuel dependent states has some of the most stringent renewable energy targets in the nation, and aims to reach 95 per cent clean energy generation by 2035.
The dumping of the flagship Victorian facility is one of the first Australian casualties of the increasingly beleaguered offshore wind sector, with US President Donald Trump dampening global investment by tearing up mammoth subsidies to the industry.
The sector has also faced lengthening completion timelines, conflicting state and federal regulation and a sharp downturn in private investment despite exorbitant government funding packages.
Energy experts have also raised alarm at the concerning lack of transmission infrastructure to support offshore wind, paired with declining domestic manufacturing capabilities and persistent labour shortages.
Victoria, unlike other states, has placed offshore wind at the heart of its decarbonisation strategy and set a bold target of producing nine gigawatts of offshore wind capacity by 2040 – which the state government claims is enough to power more than 6.5 million homes.
The company is reportedly looking to exit the Australian market entirely, which would threaten its NSW South Pacific project in Illawarra.
Sources close to the company said BlueFloat remained committed to finding a potential buyer for the NSW facility, despite the development relying on technology to float turbines - which is both risky and costly.
The NSW South Pacific Project also has numerous local competitors, unlike Victoria.
A company spokesperson told the ABC that 'BlueFloat continues to investigate funding options for its Australian projects.'
The discontinuation of the Gippsland Dawn precinct is expected to raise alarm bells about the viability of offshore wind at federal and state levels, with both Prime Minister Anthony Albanese and Victorian Premier Jacinta Allan touting the technology as one of the most crucial elements to Australia's energy transition.
However, BlueFloat is not the only global energy consortium facing mounting difficulties in Australia with Norwegian energy firm Equinor quietly dropping its plan to construct a wind farm in the Bass Strait off the north coast of Tasmania.
Equinor is also yet to formally accept an offshore wind development licence in its last remaining Australian project off the coast of Newcastle, NSW.
Victorian Energy Minister Lily D'Ambrosio has repeatedly said the Victorian government remains committed to overseeing an expansion of offshore wind projects despite the raft of headwinds facing the industry.
Offshore wind is considered to be far more capital intensive and substantially less structurally stable than onshore wind generation.