The Atlantic Array is “likely” to be just the first of many offshore wind farms shelved as Government policies wage a war of “attrition” on investors, industry experts have warned.
Supporters of green energy say the cancellation of the giant project highlights the danger of relying on overseas energy suppliers to make key investments about future power generation.
However, the Liberal Democrat MP for North Devon, Nick Harvey, a former Coalition Cabinet minister, has cautioned against “hubris” on the part of opponents, who have been in jubilant mood since RWE npower renewables pulled out of the 240-turbine, 1.2GW scheme yesterday.
Mr Harvey says the scheme has not been “tested” through the planning process and could well re-emerge in the future, re-modelled by a fresh company.
He said if more utilities began withdrawing from major projects the Government may be forced to step in and begin a process of “co-funding.”
Regen South West, the regional trade body based in Exeter, admitted the decision by the German firm was a “blow” to the industry and called for more local control of energy resources.
Director Johnny Gowdy said the move had to be seen in the context of RWE slimming down its business and shedding 6,750 jobs.
He added: “It is likely to be the first project cancelled in an attrition process that could result in the withdrawal of a number of projects.
“The offshore wind industry is likely to be reassessing project viability due to more certainty about the government’s new market incentive scheme and renewable energy road map.”
A subdivision of the company, RWE Innogy, confirmed yesterday that “technical challenges” including “substantially deeper waters and adverse seabed conditions” made plans to build one of the world’s biggest wind farms, nine miles off the Devon coast in the Bristol Channel “uneconomic”.
The Crown Estate, which controls the offshore waters, has agreed to a request to terminate the agreement, thereby removing RWE’s seabed rights.
The move has ended hopes that hundreds of jobs would be created locally.
Paul Cowling, the firm’s director of offshore wind said: “We will continue to focus on the other less technically challenging offshore projects within our extensive offshore pipeline of up to 5.2GW.
“Offshore wind remains one of the strategic objectives for RWE and the UK has a major role to play within our portfolio.
“We are looking forward to the completion of Gwynt-Y-Mor next year. At 576 MW this will become the second largest operating offshore wind farm in the world.”
Huub den Rooijen, The Crown Estate’s head of offshore wind, added: “Paradoxically, this is a positive development because it provides greater clarity to key stakeholders such as supply chain and consenting bodies, and brings greater focus to the investment opportunities.”
Nick Harvey, whose Lib Dem colleagues are at odds with the Conservatives over the future of green energy, said it was “baffling” that Admiralty charts seem to have underestimated the water depths offshore.
The need to mount the proposed turbines in enormous concrete blocks sitting on the sea bed rather than being drilled into the rock also had cost implications, he said.
He added: “RWE have not taken this decision lightly and it demonstrates the tough climate for energy investors.
“It also shows vividly the danger of Britain relying on the big six energy companies and overseas utility companies to make the crucial investment decisions for our future energy generation and climate change targets.
“If more utilities start pulling out of major energy projects the Government may have to join industry in a co-investment/co-development approach in order to give us more control over our future energy supply.”