By Toheeb Adenle<\/p>\n
UK efforts to boost renewable energy have suffered a major setback after one of the country\u2019s biggest offshore wind farm projects was halted due to surging costs.<\/p>\n
Vattenfall said on Thursday it had suspended work on its 1.4GW Norfolk Boreas site after a 40 per cent rise in the costs of the project, which the Swedish energy group intended as the first of three UK wind farms with a total investment of about \u00a310bn-\u00a311bn.<\/p>\n
\u201cWhat we see today, it simply doesn\u2019t make sense to continue this project,\u201d said Vattenfall chief executive Anna Borg.<\/p>\n
The company added that the increased cost was putting \u201csignificant pressure on all new offshore wind projects\u201d. It said it would \u201cnot take an investment decision now\u201d on Norfolk Boreas and would book an impairment charge of SKr5.5bn ($537mn).<\/p>\n
The move is a blow to the UK\u2019s bid to more than triple offshore wind capacity by 2030 \u2014 from about 14GW to 50GW \u2014 to help decarbonise the country\u2019s electricity system.<\/p>\n
Carbon Trust, an independent net zero consultancy, warned it could be the start of a \u201cgenuine crisis\u201d for the UK\u2019s offshore wind industry as a whole. \u201cWe are at a tipping point; policymakers must take note and swift action to ensure further developers and wind farms do not follow the same path,\u201d it said.<\/p>\n
Vattenfall\u2019s move comes as Rishi Sunak\u2019s government deferred a decision until the autumn over relaxing rules that impede new onshore wind farms. Supporters say both onshore and offshore wind farms are necessary to meet net zero targets.<\/p>\n
Norfolk Boreas had been one of the country\u2019s biggest planned offshore wind projects, and was intended to power 1.5mn homes with up to 140 turbines.<\/p>\n
Overall, the three wind farms planned by Vattenfall off the UK\u2019s east coast would provide electricity to more than 4mn households.<\/p>\n
But developers have said for months that projects with low locked-in electricity prices have become uneconomic, because of rising costs for items such as wind turbines and with supply chain problems in the wake of the Ukraine war.<\/p>\n
The Financial Times reported in February that Vattenfall, Denmark\u2019s \u00d8rsted and other wind farm developers have been seeking tax breaks or subsidies in response.<\/p>\n
Vattenfall\u2019s announcement follows the UK\u2019s promise of about \u00a3500mn in subsidies to India\u2019s Tata Group to support a \u00a34bn battery factor for electric vehicles.<\/p>\n
Writing in the FT this week, Kemi Badenoch, business and trade secretary, said \u201cthose of us who still believe in some semblance of a free market\u201d were \u201ccompeting with countries prepared to offer eye-watering sums to pry business away from our shores\u201d \u2014 an apparent reference to the US\u2019s $369bn Inflation Reduction Act.<\/p>\n
The British government last year guaranteed Norfolk Boreas inflation-linked prices over a 15-year period, starting at \u00a337.35 per megawatt hour at 2012 prices.<\/p>\n","protected":false},"excerpt":{"rendered":"
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