Norwegian energy major Equinor has walked away from a third offshore wind development project in Australia in another blow to the federal government’s plan to build an offshore wind industry.
Earlier this year, Equinor quietly walked away from the Bass Offshore Wind Energy project near the coast of Tasmania, as the oil and gas giant reduced its investments in renewables to boost returns for shareholders and adapt to an “uneven energy transition.”
In a short statement to Australia’s Financial Review, Equinor and its partner in BOWE, Australian firm Nexsphere, confirmed on Wednesday the end of their collaboration on the project.
“Equinor and Nexsphere have made the decision not to proceed together with the Bass Offshore Wind Energy project (BOWE) in Tasmania,” the companies said.
Nexsphere continues to pursue the project, which aims to have between 70 and 100 offshore wind turbines installed, capable of generating up to 1,500 megawatts (MW) of renewable energy, which would be enough to power 325,000 homes in the area.
Nexsphere said in a separate statement to the Financial Review that the project is now “100 per cent Australian-owned” and that the company would “work with major international offshore wind partners make the proposal a reality.”
In the latest window in April, BOWE did not obtain a feasibility license—the first required permit for offshore infrastructure in Australia in which the holder has to assess the feasibility of a potential commercial offshore renewable energy project. But Nexsphere is “progressing” an application with the federal government, the company told the Financial Review.
Setbacks in the offshore wind sector are not unique to Australia.
The global offshore wind industry continues to face significant headwinds relating to supply chain, regulatory, and macroeconomic developments.
Orsted, the world’s biggest offshore wind project developer, in May warned of a continued challenging environment for the industry.
Due to higher costs and interest rates, the company announced it had decided to discontinue the development of the Hornsea 4 offshore wind project in the UK.
By Tsvetana Paraskova for Oilprice.com
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