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Vattenfall Plans German Offshore Wind Farm After UK Project Exit

Bloomberg
Total Views: 1058
September 14, 2023

(Bloomberg) —

Swedish state-owned utility Vattenfall AB is planning further investments in offshore wind energy in Germany, showing confidence in the country’s market soon after shelving a project in the UK

The company is planning to develop a 630-megawatt offshore wind project in the German North Sea as early as 2028, which together with an adjacent farm could power more than 1.7 million German households, it said on Thursday. The company is taking over an area that had previously been awarded to RWE AG because of changes in the country’s auction system, and it is still subject to a final investment decision. 

Vattenfall’s plans to expand in Germany come as the company is in early-stage talks to sell Norfolk Boreas, one of the UK’s largest offshore projects. The company halted the 1.4 gigawatt farm despite its advanced stage of development, citing high interest rates and global supply chain problems. That’s particularly hitting developers in the UK, who say they are receiving insufficient government support.

“In spite of the recently much more difficult framework conditions, which the entire industry is suffering from, we are hereby flying the flag for offshore wind energy in Germany,” said the company’s Germany head Christian Barthelemy.

The move may come as a wake up call for the UK government that’s grappling with serious problems in its once-booming offshore wind industry. After no projects made it through the most recent auction process, the shadow energy secretary Ed Miliband said the government had “trashed the crown jewels of the British energy system.”

The European Commission is also looking to help the region’s struggling wind sector, which is dealing with issues including a lack of access to financing and increased international competition. The bloc will seek to fast-track permitting for wind projects while focusing on easing global supply-chain bottlenecks, the Commission President Ursula von der Leyen said earlier this week.

Vattenfall’s wind park is located next to another one, which it had also acquired via an entry right from RWE last year. The possible synergies of the two neighboring farms — with 1.6 gigawatts of joint capacity — could have a cost-reducing effect, Barthelemy added.

© 2023 Bloomberg L.P.

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