Development of a 1.4GW wind farm off the Norfolk coast is being halted in light of soaring project costs.
Vattenfall announced in an earnings statement that it was calling off its planned Norfolk Boreas offshore wind project. It had actually been successful in last year’s contracts for difference (CfD) auction, though rising costs, high inflation and interest rates have left offshore wind and its supply chain vulnerable. “Overall, we see cost increases of up to 40%,” explained Vattenfall.
Instead, Vattenfall’s focus will now be on the other schemes it has in the region – Vanguard East and West, which will become phase one of the planned Norfolk Offshore Wind Zone. Catrin Ellis Jones, Vattenfall’s communications manager for the Norfolk projects, assured the company is still committed to the region and will be considering the “best way forward” from here.
It has led the offshore wind industry to urge the government to come forward with new policies that will allow for key projects to go ahead.
RenewableUK’s Chief Executive, Dan McGrail, called on ministers to take account of global inflationary pressures going forwards, which have “significantly changed the economic landscape”.
McGrail continued: “We need a stronger industrial strategy for the sector, which the Chancellor should support with new measures in the Autumn Statement as a matter of urgency. Growing the UK’s supply chain won’t only bring new jobs to Britain – it will also help to ensure we can get on with the job of building new projects to provide cheap power for consumers, strengthening our energy security and tackling climate change.”
International competition for skills and the supply chain is continuing to intensify for offshore wind, which is still the lowest cost way of generating new electricity, meaning the government “needs to step up with a robust response to enable industrial growth throughout Britain,” McGrail said.
You can read the Opergy Group response to Vattenfall’s decision here.
