Energy giant RWE has pulled the plug on developing one of the world’s largest offshore windfarms amid concerns that political pressure over household bills could stifle investment.
The German group, which also owns npower, said that the costs of the Atlantic Array project in the Bristol Channel were “prohibitive in current market conditions”.
Energy firms are under pressure after steep recent rises in gas and electricity tariffs but argue that they need profits to be able to invest in power generation including from renewable sources.
Figures showing ‘Big Six’ profits from household supply multiplied five-fold in three years have sparked further anger.
The Government said RWE’s decision to abandon the Atlantic Array project, whose cost is reportedly £4 billion, was made “on purely technical grounds”.
RWE Innogy, which was developing the site, said it presented significant challenges including deep waters and adverse seabed conditions, and it would focus instead on more technically and economically viable offshore projects.
The challenges had been identified from “intensive research”, it said, adding that new technologies could open it up again in the future.
Paul Cowling, director of offshore wind at RWE Innogy, said RWE was still backing offshore wind and would be pressing ahead with other projects off Britain’s coastline.
But he added: “The commercial reality means that, in the current market conditions, overcoming the technical challenges within the Bristol Channel zone would be uneconomic for RWE at this time.”
The 240-turbine project had drawn criticism from environmentalists concerned about its impact on marine wildlife and campaigners who have branded 720ft high turbines unsightly.
The 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.”