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Energy giant AGL latest company to abandon Gippsland offshore wind zone
Credit: By Jarrod Whittaker and Danielle Pope, ABC Gippsland · Friday 5 December 2025 · abc.net.au ~~
A third wind farm planned for Australia’s first declared offshore wind zone has been abandoned, raising fears about whether Victoria will meet its offshore wind target.
Energy giant AGL announced on Friday that it would not proceed with the 2.5-gigawatt Gippsland Skies offshore wind in Victoria’s east.
Gippsland Skies was one of 11 projects granted a feasibility licence by the federal government in the Gippsland offshore wind zone.
A map of the Bass Strait showing offshore wind farms planned in the area.
Eleven projects received feasibility licences in the Gippsland Offshore Wind Zone. (Supplied: DCCEEW)
AGL said it would abandon the proposal and focus on other projects.
“AGL will prioritise options in its development pipeline of onshore wind, batteries, pumped hydro and gas firming projects,” a company spokesperson said.
The project was in the early feasibility stage when the decision was taken.
The ABC understands AGL’s decision was influenced by challenges faced by offshore wind globally, including in the United States.
Third project abandoned
Gippsland Skies is the third Gippsland offshore wind project to be abandoned this year.
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.
Gippsland Dawn received major project status from the federal government in November 2024 and had the potential to power more than one million homes.
At the time, BlueFloat said it was not commercially viable to invest in the sector.
The Victorian government has set a target to produce at least 2GW of power from offshore wind by 2032.
This week, a report from Victoria’s auditor general was 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 auction would not announce plans for the auction until at least the end of the year.
In response to AGL’s decision, a spokesperson for Ms D’Ambrosio said “offshore wind is important to the nation’s energy security and pushing down energy bills for Victorian families”.
But 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.
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