A consortium backed by AGL Energy (ASX:AGL) decided to discontinue feasibility studies for the proposed 2.5-gigawatt Gippsland Skies offshore wind project in Victoria, citing poor economic prospects, according to multiple media reports on Friday.

The consortium surrendered its so-called feasibility license to allow it to prioritize the development of onshore wind, batteries, pumped hydro, and gas firming projects, the Australian Financial Review and The Australian reported.

Victoria was targeting two gigawatts of offshore wind electricity generation by 2032.

The group also wants to focus on a final investment decision on 900 megawatts of grid-scale batteries in the next 12 to 18 months, per the reports.

AGL's shares fell almost 2% in recent trading on Friday.