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Submission + - Norfolk coast giant offshore windfarm halted due to spiralling costs (theguardian.com)
sonlas writes: The government's green energy plans faced a setback as the Norfolk Boreas offshore windfarm project by Vattenfall was halted due to soaring supply chain costs and rising interest rates. Vattenfall's chief executive Anna Borg said: "It’s important to understand that our suppliers are being squeezed. They have problems in their supply chain so it’s not so easy to mitigate these situations.”
The 40% increase in expenses was driven by high global gas prices impacting manufacturing costs, making the project unprofitable. The decision to halt work on the Norfolk Boreas windfarm has cost Vattenfall £415 million, but Borg said the move was “prudent” given the impact of costs on the project’s future profitability.
In a related news, energy majors BP and TotalEnergies have won a 7GW offshore wind site auction in Germany worth a record $14.1 billion. However, even back in 2022 market experts were warning governments that those additional costs for energy producers have negative impacts. It is important to bear in mind that negative bidding places extra financial burdens on wind farm developers. These additional costs need to be transferred to someone else, either to consumers through increased energy bills or to suppliers, as the developers have less money to invest in the turbines.
Those two news are related in the sense that what has been shown so far is that in a world where fossil fuels are cheap and abundant, renewables, and especially offshore windfarm, are cheap and easy to deploy. However, signs are pointing toward a world where fossil fuels supply is not as cheap and abundant as expected, and that may have an impact on plans made by governments to reach Net Zero, or to even just reduce their CO2 emissions.
The 40% increase in expenses was driven by high global gas prices impacting manufacturing costs, making the project unprofitable. The decision to halt work on the Norfolk Boreas windfarm has cost Vattenfall £415 million, but Borg said the move was “prudent” given the impact of costs on the project’s future profitability.
In a related news, energy majors BP and TotalEnergies have won a 7GW offshore wind site auction in Germany worth a record $14.1 billion. However, even back in 2022 market experts were warning governments that those additional costs for energy producers have negative impacts. It is important to bear in mind that negative bidding places extra financial burdens on wind farm developers. These additional costs need to be transferred to someone else, either to consumers through increased energy bills or to suppliers, as the developers have less money to invest in the turbines.
Those two news are related in the sense that what has been shown so far is that in a world where fossil fuels are cheap and abundant, renewables, and especially offshore windfarm, are cheap and easy to deploy. However, signs are pointing toward a world where fossil fuels supply is not as cheap and abundant as expected, and that may have an impact on plans made by governments to reach Net Zero, or to even just reduce their CO2 emissions.
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