Burriss’ Norfolk wind farm has been put on hold due to rising costs

Burriss’ Norfolk wind farm has been put on hold due to rising costs

One of Vattenfall’s facilities

Swedish energy giant Vattenfall has announced the halt of work on one of the largest offshore wind farms in the United Kingdom. The company believes it is not financially sound to continue. This is a slap in the face for the UK government’s commitment to green energy.

The affected project is called Norfolk Burris, and as the name suggests, it was to be built off the coast Norfolk in England. This offshore wind farm was to be one of the largest in the UK.

Swedish state-owned company Fattenfall It originally had an agreement to supply power at a fixed price over a period of 15 years, but conditions in the market have now worsened, the company said.

Expensive and demanding

“Offshore wind is essential to providing cheap, safe and clean electricity, and is a key component of Vattenfall’s strategy for a fossil-free existence,” says Anna Borg, CEO of Vattenfall since 2020. “The current conditions are very difficult for the entire industry, as there is supply chain scarcity, price growth and increased capital costs,” she says.

Vattenfall states that production costs have increased by 40% due to the global increase in gas prices. The wind turbines themselves are becoming more expensive to build, in addition to the rising costs that affect all links in the supply chain.

The prestigious Norfolk Boreas project had a frame cost of several tens of billions of Norwegian kroner and was intended to supply electricity to one and a half million British homes. This project is not affected only. Burg says the increased costs will put “significant pressure on all new offshore wind projects.”

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Read: Offshore wind is not sustainable

A frightening promise

Vattenfall won the tender from the British government last year to build the Norfolk Boreas project. The company promised to be able to deliver electricity at a record low of £37.35 per megawatt hour. Anna Borg stated that “it is clear to everyone that the situation has changed dramatically since last year”. Thus, the price must be “sharply increased” for the project to be financially viable. The potential for lower profitability affects many similar projects.

According to Vattenfall, the decision to stop the project would result in a loss of income of SEK 5.5 billion. The company stresses that it bases its decisions on profitability, and that they continue to believe that offshore wind will be critical to energy security and the achievement of European climate goals.

It’s not just Fattenfall that is struggling to keep its promises. The UK government’s target to increase offshore wind capacity to 50 gigawatts by 2030 is in jeopardy. Total deliveries are currently 14 GW. Two other projects at risk in the Norfolk area are Vanguard East and Vanguard West. These projects are expected to produce 4.2 gigawatts.

Jess Ralston in The Independents Energy and Climate Intelligence Unit In Great Britain indicates that the UK government should adapt the electricity pricing framework to prevailing economic conditions. By taking into account the increasing costs, they may still ensure sustainable growth in wind power.

Unsafe trip?

Sweden’s Vattenfall has also made inroads into the Norwegian offshore wind market. In 2022, they create with The seagull A joint venture company to compete for upcoming Norwegian licenses to develop offshore wind power, it says a trip. Seagust is a Norwegian offshore wind energy company founded by Ferd and Arendal’s Fossekompani in 2021.

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The Norwegian authorities have an ambition to develop up to 4.5 gigawatts of both floating and stationary wind turbines, and by 2040, according to the plan, areas will be set aside for The offshore wind capacity is 30,000 megawatts.

Here, Vattenfall wants to join the game. “The partnership with Seagust gives us a great opportunity to bring renewable energy to industry and consumers. This follows our vision of a fossil-free society within a generation,” said Helen Bystrom, Head of Wind Energy Business Area at Vattenfall.

The new company is called Seagust + Waterfall, and wants to occupy a leading position in the European development of offshore wind. The new company plans to bid for licenses for both Utsira Nord and Sørlige Nordsjø II in the North Sea. The application deadline is September 1 This year – to qualify for both projects.

Are the projects at risk of being affected by the same problems plaguing the Norfolk area? In Norway, we’re not immune to international economic flows either, something we’ve really noticed with winter energy prices. Inflation, rising interest rates and problems in the supply chain could present the same difficulties for Vattenfall and its competitors in the Norwegian offshore wind development area as they have already done in the UK.

Alarming figures for floating offshore wind: – It could cost 250 billion

According to the government, the new industrial venture in Norway will be floating offshore wind, a technology that has not yet matured. Therefore, the government decided to support development outside of Utsera.

No one has yet wanted to give any estimates of how much it will cost, but the industry website does europower It has now reached new DNV numbers, which will be published in a report in the fall. Here, DNV estimates how much it will cost to build floating offshore wind in 2030. That’s written The newspaper online.

250 billion for full development

Contact the electronic newspaper:

According to Europower, cost estimates vary widely, but the most likely estimate is that the plant will require a lifetime electricity rate of NOK 1.50 per kWh plus VAT. At worst, it could be NOK 2.11.

The area outside Utsera is to be divided into three wind farms with a capacity of 500 megawatts each. Europower calculated that each of these would cost more than NOK 83 billion.

“The government has announced three fields in Otsera Nord. If the three fields are developed, totaling 1,500 MW, the total cost will be around NOK 250 billion,” Europower wrote.

Norway will give billions to support unprofitable projects – so that more unprofitable factories can be built.

NHH professor Lars Sørgard recently wrote a reader-interesting post in DN Where he criticizes the government.

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that it The newspaper online who makes engagement.

Surgard is best known as the Chairman of the Energy Committee. He worries that politicians will now open a subsidy trap for building projects that will make Norway poorer.

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Hanisi Anenih

Hanisi Anenih

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