Sweden's Vattenfall is evaluating options for proceeding with offshore wind projects off the Norfolk coast in Britain after stopping work on one of them earlier this year, the company said on Wednesday.
Vattenfall (VATN.UL) halted development of its 1.4 gigawatts (GW) Norfolk Boreas wind farm in July due to rising costs.
Norfolk Boreas had won a contract-for-difference (CfD) in a British auction in 2022, guaranteeing a minimum price of 37.35 pounds per megawatt hour (MWh) in 2012 prices for the electricity produced, which equates to around 45 pounds/MWh today. Britain’s CfD scheme, launched in 2014, offers renewable power developers a guaranteed price for their electricity.
Norfolk Boreas formed part of Vattenfall's wider Norfolk Offshore Wind Zone development, which also included its 2.8 GW Norfolk Vanguard project and where work continues.
"While options to deliver the projects as consented are being considered, we remain focused on continued development of the Zone which will provide millions of homes and businesses in the UK with low cost, clean power," a Vattenfall spokesperson said.
He did not wish to comment on specific options such as a potential sale of the projects.
Under British rules it is not possible to renegotiate the CfD contract once the auction round has concluded and it has been signed, the spokesperson said.
However, after a default, a project is eligible to enter future auction rounds, though not the round immediately following the default, he added.
Britain is currently holding its latest, fifth, CfD auction round for renewable energy projects, which includes offshore wind and where results could potentially be announced as early as this week.
Offshore wind projects in other markets have also come under increasing cost pressure, especially in the U.S. where several developers have either halted projects or are seeking improved terms for power sale agreements.
