German electric utility company RWE has cancelled its plan to build the 1.2GW Attlantic Array wind park off the coast of Britain, suggesting the uncertainty about UK government’s commitment to renewables as one of the reasons.
The wind park, foreseen to be build off the coast of North Devon, south-west England, was supposed to become one of the biggest off shore wind parks in the whole world. With 240 wind turbines, it could have powered up to 900,000 households.
"This is not a decision we have taken lightly, however given the technological challenges and market conditions, now is not the right time for RWE to continue to progress with this project," Paul Cowling, director of offshore at RWE's renewable energy unit Innogy, said in a statement.
Britain's energy sector has come under intense scrutiny in recent months, after opposition leader Ed Miliband said he would cap prices following years of steep rises.
In response, Prime Minister David Cameron has said he would cut so-called green taxes. Environmental taxes and social charges contribute nearly 10 per cent to domestic energy bills, which average more than £1,200 a year for each household.
The six energy companies that dominate Britain's energy market, including RWE, have defended steep price rises, blaming green costs, wholesale prices and the cost of using the national grid.
However, a spokesman for the Department of Energy and Climate Change said RWE's decision to pull a plug on the project was based on purely technical grounds and confirmed the UK remains committed to its renewable energy targets.
Offshore wind parks have a relatively high risk profile compared with onshore sites, as turbines are installed in open water and need to withstand more challenging weather conditions such as higher wind speeds.
"We will continue to focus on the other less technically challenging offshore projects within our extensive offshore pipeline of up to 5.2 GW," Cowling said.
RWE, under pressure from plunging wholesale power prices, a boom in renewable energy capacity in its home market as well as Germany's decision to abandon nuclear power by 2022, is in the process of a major restructuring that has led it to slash about 13,000 jobs, or about 18 per cent of its workforce since 2011 and to halve its dividend for this year.
With 30.8 billion euros of debt, the group has embarked on a strategy, aiming to partly outsource funding for expensive renewable energy projects, including offshore.
Some environmental groups previously expressed their concern regarding the Atlantic Array project, saying it could have adverse effects on marine wildlife.
Trade organisation RenewableUK said the decision was disappointing but not surprising as the project was "always going to be technically challenged" because of its deep-water, seabed location.
Chief executive Maria McCaffery told the BBC Radio 4 Today programme: "When the whole energy sector is under such pressure to reduce costs, they really can't take the chance of deploying in a place where it would be more expensive because ultimately that would have to be translated into fuel bills."