Equinor has reportedly cancelled its offshore wind projects in Spain and Portugal, in addition to its previously announced exit from Vietnam, and could withdraw from more countries to rein in spending, according to a recent Reuters report.
“We have been actively pursuing early-phase opportunities in a series of markets around the world, in different geographies, and we confirm that we are exiting Vietnam, Spain and Portugal,” Equinor’s head of renewables, Paal Eitrheim, was quoted by Reuters to say.
Local media first reported Equinor’s exit from Spain and Portugal on August 27th.
As reported by Reuters, Equinor officials have indicated the need to prioritize capital more than in the past given rising costs in the offshore wind sector. Those rising costs have resulted from inflation, high interest rates and supply chain delays.
With regard to offshore wind, “it’s getting more and more expensive, and we think things are going to take more time in quite a few markets around the world,” Eitrheim was as saying. He added that Equinor may pull out from more markets.
Eitrheim did not say how much capacity Equinor had been planning in Spain and Portugal.
Renewables were seeing a two-track pace of development, with onshore wind and solar being less affected by rising costs than Equinor’s offshore wind business, he added.
The company is maintaining its target of 12-16 gigawatts of installed renewable energy capacity by 2030, up from 0.9 GW in 2023, although this ambition was not a “hard target,” Eitrheim said. “I’m not building 12 to 16 GW if that is at the expense of profitability.”
Still, Equinor’s renewables business was entering its busiest period ever, he added.
The company is constructing the first phase of the Dogger Bank offshore wind farm in the UK North Sea with partners SSE and Vaargroenn.
In addition, its Empire Wind project near New York and two Baltic Sea wind farms in Poland were close to final investment decisions. “So that is what is going to build the next generation of offshore wind growth for us,” Eitrheim was quoted to have said.
Eitrheim said that Equinor has not changed its overall green-energy targets, but that onshore renewables – solar and onshore wind – look more attractive from a cost standpoint at present. He hinted that Equinor may continue to pull out of other offshore wind geographies as well, depending on future developments.
The vast majority of Equinor’s revenue comes from oil and gas, and it has other potential uses for its capital. Earlier this week, the company announced a commitment to invest up to $6.7 billion per year in the Norwegian offshore oil sector through 2035.
Equinor announced its decision to pull out of Vietnam on August 23, citing cost, and it is closing its local office in Hanoi. In addition to the same inflation and cost-of-capital factors found elsewhere, regulatory delays and the local preference for state-owned enterprises are holding back development off the Vietnamese coast, even though Vietnam has favorable near-shore site options and strong wind conditions. Orsted, the market leader in global offshore wind, suspended its Vietnamese-market plans last year; Equinor’s departure leaves the Southeast Asian country without any international partners for offshore wind projects.
