Equinor Retreats From Three Offshore Wind Markets

Norwegian state oil company Equinor has announced that it is retreating from key emerging markets in the global offshore wind sector. After closing its office in Vietnam, it is now canceling all offshore wind projects in Portugal and Spain. 

Equinor cited high interest rates, inflation in equipment and construction costs, and delays in the offshore wind supply chain for its decision to exit Spain and Portugal. "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," renewables chief Paal Eitrheim told Reuters. 

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 firm 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.