The Australian state of Victoria said on Tuesday it would delay its first offshore wind auction amid challenging investment climate in the sector, in another blow to Australia’s offshore wind ambitions.
The offshore wind auction in Gippsland, initially slated to be held this month, will be delayed until at least by the end of 2025, by which time the Victoria government would unveil a new timeline.
“As the global market for offshore wind investment changes, we're making sure the auction is competitive and attractive and will release a new timeline for this process later this year,” Victoria’s Energy Minister Lily D'Ambrosio said in a statement carried by ABC News.
In recent months, 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.”
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.
Germany’s latest offshore wind auction without government subsidies failed to attract a single bid last month, alarming the local offshore wind sector, which is calling for a fundamental redesign of Germany’s renewable energy auctions.
Ørsted, the world’s biggest offshore wind project developer, in May warned of a continued challenging environment for the industry.
Ørsted’s shareholders last week approved a proposed $9.4 billion (60 billion Danish crowns) rights issue to raise capital from existing shareholders to cover immediate financing needs amid regulatory uncertainties in the U.S.
“We’re raising capital to cover immediate financing needs from retaining full ownership of Sunrise Wind, to manage risks from regulatory uncertainty in the US, and to strengthen Ørsted’s capital structure so we can deliver on our growth pipeline and long-term value creation,” president and CEO, Rasmus Errboe, said in a statement on Monday.
By Tsvetana Paraskova for Oilprice.com
