From Windfall to Vattenfall
Thematic Reports
The future of offshore wind generation
What happened? On 20 July 2023, Swedish energy company Vattenfall announced that it would stop development on the 1.4GW Norfolk Boreas offshore wind site, taking a SEK5.5bn (£412m) impairment charge.
Why did this happen? The decision was based on rising costs and supply chain vulnerability impacting profitability. While this may be the most high-profile project cancellation in recent memory, the Vattenfall announcement did not arise in a vacuum, as it followed months of lobbying by offshore wind developers, asserting that rising costs were exceeding the regulatory price point, rendering projects unprofitable.
Why does it matter? In order to consolidate its position as a leading market for offshore wind, in 2022 the UK Government set an offshore wind power generation target of 50GW by 2030 (from c.14GW at present). If more developers were to follow suit, this may impair UK net zero targets and trigger a rethink in renewable energy infrastructure investing.
In this report, we provide a high-level overview of the relevant dynamics and explore the investment trust impact.
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