Swedish energy giant Vattenfall halts UK wind farm project due to spiralling costs

Swedish state energy giant Vattenfall has abandoned plans to build a multi-billion-pound wind farm off Norfolk because of spiralling costs – scuppering hopes it would power about 1.5m homes. 

It blamed a huge rise in costs since it won a contract for the Norfolk Boreas project last year after bidding a record low price of £37.35 per megawatthour, based on 2012 prices and linked to inflation. 

Chief executive Anna Borg said: ‘The market for offshore wind power is challenging. 

Higher inflation and capital costs are affecting the entire sector but the geopolitical situation has made offshore wind and its supply chain particularly vulnerable. We see cost increases up to 40 per cent.’ 

Ill wind: Vattenfall blamed a huge increase in costs for abandoning the Norfolk Boreas windfarm project which, it was hoped, would power about 1.5m homes

The decision has cost it £415million. Vattenfall has two other projects – Norfolk Vanguard East and West – which are under scrutiny. 

Dan McGrail, of RenewableUK, said: ‘The Government needs to step up with a robust response to enable industrial growth.’ 

A government spokesman said: ‘We understand there are supply chain pressures globally, not just in the UK, and we are listening to companies’ concerns.’ 

The UK is a world leader in offshore wind farms, home to the four largest in Europe, with capacity to power at least 10m homes per year