Offshore Wind Firms Hesitate on Australia as Public Funding Talks Emerge

Australia’s offshore wind ambitions face uncertainty as major companies scale back, citing economic challenges, while the federal government explores public investment to salvage the sector. The retreat of firms like Equinor highlights global headwinds, raising concerns about energy security and reliance on unproven renewables under the current Labor government.

In early 2025, Norwegian energy giant Equinor withdrew from the Bass Offshore Wind Energy (BOWE) project in Tasmania, ending its partnership with local firm Nexsphere, as reported by The Australian Financial Review on July 2, 2025. Equinor, which held a majority stake since 2022, cited supply chain issues, inflation, and high interest rates as reasons for refocusing on fossil fuels to boost shareholder returns. Nexsphere, now fully Australian-owned, plans to continue with the 1,500-megawatt (MW) project, aiming to power 325,000 homes, but faces steep financial hurdles. “We’ll work with international partners to make this a reality,” Nexsphere told the Financial Review, signaling the need for new investment.

The global offshore wind sector is reeling from rising costs and regulatory delays, with companies like Orsted halting projects like Hornsea 4 in the UK, per OilPrice.com. In Australia, the Clean Energy Investor Group (CEIG) warned on July 7, 2025, that Victoria’s heavy reliance on offshore wind, coupled with undersized Renewable Energy Zones (REZ), risks stifling investment. The Labor government’s proposed multibillion-dollar funding package for Victoria’s offshore wind plans, reported by The Australian Financial Review, aims to keep projects alive but draws criticism for propping up a struggling industry while coal plant closures lag.

Critics argue Labor’s push for renewables overlooks practical energy needs, with public funds potentially bailing out high-risk projects. The withdrawal of major players like Equinor underscores the sector’s fragility, and local opposition in areas like Bunbury, where Ocean Winds and EDF pursue feasibility licenses, adds complexity. As Australia balances its energy transition, the government must ensure taxpayer money isn’t squandered on ventures that global firms deem unviable, prioritizing reliable power for households and businesses.