Comment on Vattenfall Norfolk Boreas wind farm

Swedish energy group Vattenfall has halted development of its planned Norfolk Boreas wind farm after costs on the project rose by 40%.

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By George Smeeton

info@eciu.net

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Commenting on the news that Swedish energy group Vattenfall has halted development of its planned Norfolk Boreas wind farm after costs on the project rose by 40% [1], Jess Ralston, Head of Energy at the Energy and Climate Intelligence Unit (ECIU) said: “Costs of wind farms have been driven up by ongoing high gas prices causing supply chain inflation, just like for other industries. As the OBR recently stated, the UK is one of the countries still most reliant on gas, and this is putting us at risk of future crises potentially adding the equivalent of 13% of GDP to national debt.[2]

“If Government gets the policy wrong on the current round of renewables auctions and doesn't keep pace with increasing costs, the UK could end up even more reliant on foreign gas, leaving households on the hook with higher bills. Doubling down on renewables, which remain much cheaper than gas, means in future price spikes we'll be less exposed.”

ENDS

Notes to editors:

  1. Vattenfall puts brakes on UK wind farm as costs surge 40%: https://www.ft.com/content/f9d0f4f9-6d95-44a9-924b-d88627fd6485
  2. OBR: Fiscal risks and sustainability – July 2023: https://obr.uk/frs/fiscal-risks-and-sustainability-july-2023/#chapter-2
  3. The costs of offshore wind fell by 75–80% in little over a decade, from £149–191 per MWh in 2011 (Offshore Wind Cost Reduction Task Force) to a strike price of £37.35/MWh (in 2012 prices; c.£45/MWh current prices) in the auction that concluded in 2022 (Allocation Round 4). Cost inflation of 40% could increase the strike price to around £50-55/MWh (in 2012 prices, £60-65/MWh current prices), which is still around a third lower than the forecast wholesale price of £100/MWh set by gas for the rest of the decade (Cornwall Insight), and around half the CfD strike price of £90/MWh (2012 prices; c.£115/MWh in current prices) for Hinckley C nuclear power plant.

For more information or for interview requests:

George Smeeton, Head of Communications, ECIU, Tel: 07894 571 153, email: george.smeeton@eciu.net