Work has been suspended on the UK’s biggest wind farm project as the developer blames inflation for spiralling costs.
Swedish utility firm Vattenfall warned that the country’s net-zero targets are at risk if the government does not improve incentives.
The Norfolk Boreas project would be capable of providing electricity for around 1.5 million homes.
“Higher inflation and capital costs are affecting the entire energy sector, but the geopolitical situation has made offshore wind and its supply chain particularly vulnerable,” Vattenfall president Anna Borg said.
Vattenfall, one of Europe’s biggest wind producers, said that the market conditions had deteriorated since it signed a contract that fixes the price of the electricity it sells for 15 years.
Ms Borg warned that warned that without improved incentives Britain could struggle to meet its wind targets.
The 1.4 gigawatt project, which was scheduled to begin producing electricity in the late 2020s, was part of Britain's plans to grow its offshore wind capacity to 50 gigawatt by 2030 from about 14 gigawatt now.
Ms Borg said overall costs have increased by about 40 per cent and that the development of Norfolk Boreas in its current form would be halted.
Vattenfall will review two other projects in the area, Vanguard East and Vanguard West.
“Offshore wind is essential for affordable, secure and clean electricity, and it is a key element of Vattenfall’s strategy for fossil-free living,” Ms Borg said.
“But conditions are extremely challenging across the whole industry right now, with a supply chain squeeze, increasing prices and cost of capital, and fiscal frameworks not reflecting current market realities.
“Vattenfall believes in the strong fundamentals and rationale for the Norfolk projects. However, considering market conditions today, we are stopping the current development track for Norfolk Boreas and evaluating the best way forward for all three projects in the Norfolk Zone.”
The move will cost Vattenfall £415 million ($537 million), Vattenfall said as it released its second-quarter financial results.
It has become more expensive to borrow money to build the wind turbines and supply chains are also struggling, the business said.
“We have attractive wind power projects in the pipeline, and investment decisions will always be based on profitability,” it added.
“We are convinced that offshore wind power is crucial for energy security and meeting the climate goals in Europe.”
Jess Ralston, head of energy at the Energy and Climate Intelligence Unit, said that the government needs to take into account rising costs for wind farm companies when it awards contracts.
For much of the past decade, offshore wind farms have been promised a fixed price for the electricity they produce through a so-called contract for difference.
This means that if electricity prices are below the promised price – known in industry jargon as the strike price – then companies get a subsidy to make up the difference. If prices rise above that level then they have to pay back their additional gains.
There is no financial penalty for Vattenfall for exiting its contract for difference but it will be banned from putting the same project forward for a new contract in next year's government auction.
Race card
4pm Al Bastakiya Listed US$300,000 (Dirt) 1,900m
4.35pm Mahab Al Shimaal Group 3 $350,000 (D) 1,200m
5.10pm Nad Al Sheba Turf Group 3 $350,000 (Turf) 1,200m
5.45pm Burj Nahaar Group 3 $350,000 (D) 1,600m
6.20pm Jebel Hatta Group 1 $400,000 (T) 1,800m
6.55pm Al Maktoum Challenge Round-3 Group 1 $600,000 (D) 2,000m
7.30pm Dubai City Of Gold Group 2 $350,000 (T) 2,410m
The National selections:
4pm Zabardast
4.35pm Ibn Malik
5.10pm Space Blues
5.45pm Kimbear
6.20pm Barney Roy
6.55pm Matterhorn
7.30pm Defoe
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BBC business reporters, like a new raft of government officials, are being removed from the national and international hub of London and surely the quality of their work must suffer.
Profile of MoneyFellows
Founder: Ahmed Wadi
Launched: 2016
Employees: 76
Financing stage: Series A ($4 million)
Investors: Partech, Sawari Ventures, 500 Startups, Dubai Angel Investors, Phoenician Fund
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Director: Joseph Kosinski
Rating: 4/5
The specs
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
How will Gen Alpha invest?
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
Global state-owned investor ranking by size
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United States
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2.
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China
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3.
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UAE
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4.
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Japan
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5
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Norway
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Canada
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Singapore
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Australia
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Saudi Arabia
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South Korea
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
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Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
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Power: 240hp at 5,500rpm
Torque: 390Nm at 3,000rpm
Transmission: eight-speed auto
Price: from Dh122,745
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Teaching in coronavirus times
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