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UK efforts to spice up renewable vitality have suffered a significant setback after one of many nation’s largest offshore wind farm initiatives was halted resulting from surging prices.

Swedish vitality group Vattenfall on Thursday stated it had suspended growth of its 1.4GW Norfolk Boreas wind farm after prices on the mission rose 40 per cent.

Elevated price was placing “important stress on all new offshore wind initiatives”, the corporate stated, including that it might “not take an funding choice now” on the mission and would guide an impairment cost of SKr5.5bn ($537mn).

“What we see in the present day, it merely doesn’t make sense to proceed this mission,” stated Vattenfall’s chief govt Anna Borg.

The UK authorities is in search of to greater than triple offshore wind capability by 2030 to assist decarbonise the nation’s electrical energy system, from about 14 gigawatts to 50GW.

Norfolk Boreas had been one of many largest new initiatives within the offshore wind pipeline, set to assist energy 1.5mn properties. The wind farm was resulting from be the primary out of three to be constructed by Vattenfall within the UK on the east coast, to energy greater than 4mn properties.

The wind business has warned over the previous few months that rising rates of interest in addition to turbine and labour prices have been placing UK initiatives in danger.

The British authorities final 12 months awarded the Norfolk Boreas mission a contract guaranteeing a set value of £37.35 per megawatt-hour for its electrical energy for the primary 15 years, in 2012 costs and linked to inflation. Ministers celebrated a sum that was effectively beneath those agreed in earlier years.

Nonetheless, builders have argued that surging prices linked to provide chain issues within the wake of Russia’s full-scale invasion of Ukraine imply the initiatives might now not be economically viable below these phrases.

Vattenfall’s announcement is prone to heap stress on the federal government which is within the means of awarding the subsequent spherical of fixed-price contracts. Builders have already warned that the utmost value of £44/MWh in 2012 costs can also be too low.

Mads Nipper, chief govt of Ørsted, the world’s largest offshore wind developer, instructed the Monetary Occasions final month that it was “inconceivable” that UK initiatives weren’t struggling.

The opposite two Vattenfall initiatives might be able to get greater authorities contracts, that means they might nonetheless go forward, Borg stated. “We are going to now look into the state of affairs and discover one of the best ways ahead for all these initiatives — the vitality is desperately wanted,” she stated.