Swedish energy group Vattenfall has announced the suspension of its ambitious offshore wind power project, Norfolk Boreas, in the UK, as soaring costs dealt a major blow to the company’s earnings.
The Norfolk Boreas project, one of the largest in the offshore wind pipeline, had been slated to power 1.5 million homes in the first phase of Vattenfall’s major developments.
However, the 1.4GW project faced an uphill battle due to a significant 40% increase in costs, leading to a negative impact on the company’s earnings to the tune of SEK 5.5 billion (£410m).
In light of the prevailing economic conditions, Vattenfall made the decision to halt the development of Norfolk Boreas in its current form.
The company said it refrained from making a final investment decision, opting instead to book an impairment charge of $535 million (£413m) in the half-year financial results.
In their half-year financial report, Anna Borg, President and Chief Executive Officer of Vattenfall, highlighted the challenges faced in the offshore wind market, citing higher inflation and capital costs impacting the entire energy sector.
Ms Borg said: “We will examine the best way forward for the entire Norfolk Zone, which in addition to Boreas also includes the Vanguard East and West projects.”
