Building halted on wind farm after costs spiral

An offshore windfarm (Image: Getty) A Tory MP has warned ministers that they must not allow soaring costs to blow Britain’s wind industry ‘off course’. Swedish energy giant Vattenfall has halted work on one of the country’s largest offshore wind farms, saying prices have climbed by 40 per cent because of a rise in global gas prices which have fed through to manufacturing costs. This has put ‘significant pressure on all new offshore wind projects’, the business warned. It has become more expensive to borrow money to build the wind turbines and supply chains are struggling, the energy firm added. But Conservative MP Selaine Saxby said: ‘Offshore wind farms are crucial to lowering people’s bills and shielding families and businesses from Vladimir Putin ‘s malign influence on international gas markets. ‘Even with increasing costs, they’ll cut household bills and strengthen our energy security. We cannot allow Britain’s wind industry to blow off course…I hope ministers will help secure projects by allowing companies to bid for higher guaranteed prices, which will still be cheaper than fossil fuels but cover their costs.’ Vattenfall stopped its multi-billion-pound Norfolk Boreas wind farm, designed to power the equivalent of 1.5 million British homes, because it was no longer profitable. The firm won a government contract to build the project last year after bidding a record low price of £37.35 per megawatt hour for the electricity generated. Jack Richardson, head of energy at think tank Onward, said: ‘The Government should consider reform to stop projects bidding too low only to run into trouble later. ‘The Chancellor should press on with his policy of extending capital allowances for infrastructure spending to ease the pressure on new projects.’ Vattenfall said two other sites, known as Van-guard East and Vanguard West, will now be reviewed. Anna Borg, Vattenfall chief executive, said the price would now need to be ‘significantly higher’. She said: ‘Offshore wind is essential for affordable, secure and clean electricity, and it is a key element of Vattenfall’s strategy for fossil-free living. But conditions are very challenging across the industry right now. We are evaluating the best way forward for all three projects.’ Tory MP Sally-Ann Hart said: ‘We can’t afford to be complacent about renewable energy. If we don’t support projects, we’ll lose investment overseas and be left importing expensive gas for longer. Once operational, offshore wind projects will generate cheap electricity, cutting people’s bills. But their construction is not immune to supply chain problems and industry’s heavy reliance on expensive gas to make them. I hope ministers look at what tax relief and support they can offer the industry.’