German energy Gaint RWE is Dumping a $10 Billion offshore Windfarm in Gippsland
Executive summary
RWE has formally ceased development of the Kent offshore wind project — an up-to-2 GW proposal in Victoria’s Gippsland declared area — after feasibility work and a review of market conditions, citing competitiveness, supply‑chain cost pressure and uncertainty about the auction framework [1]. This pull‑out follows BlueFloat Energy abandoning the 2.1 GW Gippsland Dawn project earlier in 2025 and leaves multiple Gippsland licences still active but under heightened commercial stress [2] [3] [4].
1. RWE walked away from “Kent” — what the company said
RWE announced it had “called off” development of the Kent offshore wind project — a site that had been awarded a feasibility licence and had potential capacity up to 2 GW — saying the decision followed a review of the project’s competitiveness, supply‑chain cost uncertainty and ongoing questions over the future design and timing of Victoria’s auction/tender framework [1]. RWE stressed the decision related solely to this Kent project rather than signalling an exit from Australia overall [1] [5].
2. Not a $10 billion number in the available reporting
Available sources do not state a $10 billion figure specifically attached to RWE’s Kent project. Reporting describes Kent as a potential up‑to‑2 GW site [1] [5]. Separately, the Gippsland Dawn proposal earlier reported by other outlets was framed as a multi‑billion‑dollar project [4] [6], but the explicit claim that RWE “is dumping a $10 billion offshore windfarm” is not supported by the provided sources [1] [4].
3. Context: Gippsland is a big, contested zone
Gippsland’s declared offshore wind area covers roughly 15,000 km2 and the Australian government has indicated the zone could host large-scale projects totalling many gigawatts (figures cited include potential generation of 25 GW across the zone and up to 9 GW in particular planning discussions), with multiple feasibility licences issued since 2024 [7] [8]. RWE’s Kent and BlueFloat’s Gippsland Dawn were two prominent proposals in that broader package of projects [2] [6].
4. Multiple pressures behind developer exits
Industry and reporting point to a set of recurring barriers: high and volatile supply‑chain costs, unclear auction/tender design and timing from government, and a complex approvals regime split between federal and state obligations that makes long‑lead investments risky [4] [3]. RenewEconomy highlights RWE’s explicit concern about Victoria’s delayed auction and funding uncertainty; Pinsent Masons and conference remarks note boards are asking “where is my offtake?” and struggle to build strong business cases without clearer policy and revenue certainty [3] [4].
5. This is part of a pattern, not a one‑off
BlueFloat Energy had earlier surrendered its Gippsland Dawn feasibility licence in July 2025, and at least one other major joint venture paused or re‑evaluated its plans — creating a pattern of developers retracting or pausing activity in Gippsland amid the same structural uncertainties [2] [3]. Industry sources say more exits could be expected until the auction and financial support picture clarifies [3].
6. What proponents and governments have argued
When RWE and others initially won feasibility licences, the projects were promoted as long‑term contributors to Australia’s decarbonisation and energy supply — RWE’s 2024 announcement framed Kent as a possible 2 GW development, powering up to 1.6 million homes at full buildout and entering the Australian offshore market with decades‑long horizon planning [5] [9]. Government materials also present Gippsland as a strategic zone with potential for tens of gigawatts and thousands of jobs if projects progress [7] [8].
7. Two competing narratives: economics vs. policy delay
One narrative from developers and some analysts is that economics and supply‑chain pressures make projects unviable today, and that policy clarity and auction design must improve to unlock investment [4] [1]. An alternate view implicit in government messaging is that Gippsland remains a designated strategic zone with large potential and that development can proceed when procurement arrangements and approvals are finalised [7] [8]. Both positions appear in the available reporting [4] [7].
8. What to watch next
Watch for Victoria’s auction timetable, federal‑state funding clarity and any changes to off‑take or grid arrangements: these variables are repeatedly cited as decisive for whether feasibility licences convert into construction approvals and investment [3] [4]. Also monitor announcements from other licence holders: industry commentary predicts some consolidation — fewer competing projects — could follow the current wave of withdrawals [3].
Limitations: the supplied sources cover RWE’s public statement about Kent, earlier industry commentary and government zone declarations but do not include internal RWE financial figures or an authoritative $10 billion valuation tied to Kent; such a dollar figure is not found in the materials provided here [1] [5] [4].