AGL discontinues studies for 2.5GW offshore wind project in Victoria
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The news: Energy retailer AGL and its consortium partners will discontinue feasibility studies for its proposed 2.5 gigawatt wind project off the coast of Gippsland.
The numbers: AGL shares were down 1.3% to $9.35 at 3:20pm AEDT. The stock is down 15.6% over the last 12 months.
The company said it will now prioritise other options in its development pipeline of onshore wind, batteries, pumped hydro and gas firming projects, including taking final investment decision on 900 megawatts of grid-scale batteries in the next 12-18 months.
The context: The Gippsland Skies project, which was in an early feasibility study phase, is jointly owned by a consortium comprising AGL, Mainstream Renewable Power, Reventus Power and Direct Infrastructure.
The consortium’s decision comes amid increasingly difficult economics for offshore wind projects globally, with developers facing rising costs, policy uncertainty and a series of setbacks in major markets.
Several large US offshore wind projects have stalled or been restructured following recent policy changes, prompting reviews across company portfolios and heightening investor sensitivity to perceived risks in other jurisdictions.
The source: AGL statement
