SSE is pulling out of an offshore wind farm and won’t be investing in a number of others it has a hand in.
The news will take a little wind out of the sails of the UK industry which was on a high yesterday after Siemens agreed to build wind turbine blades in Yorkshire, creating 1,000 jobs.
SSE said today it wants to sell a 50% stake in the 340MW Galloper offshore wind farm and plans to talk with partner RWE Innogy on how to go about this.
The firm said it does not believe Galloper will earn enough money – after the cost of building and operating it – compared with its other projects.
A question mark also hangs over its 750MW Beatrice wind farm (pictured) which SSE owns 75% of, with 25% partner Repsol Nuevas Energias UK.
The Scottish energy firm said it would focus spending on this for the rest of 2014 and decide by the end of the year whether to keep this up.
That’s because it may get on a government list for help with investment and also depends on whether it can get rid of 25% of its stake and cut the costs.
As for its role in the SeaGreen and Forewind farms, it won’t “extend its commitment” to them until it has “sufficient confidence in the viability of the wider offshore wind sector”.
Jim Smith, SSE’s Managing Director for Generation Development said: “There are two major, related hurdles that projects currently have to overcome. The first is the Levy Control Framework, which has the reasonable objective of controlling costs to customers from government energy policies – but which also means there is limited support for offshore wind.
“The second is cost – the future of offshore wind farm development depends on a sustainable and lower cost supply chain.”
Wind energy bodies told ELN the short term line up of wind farm projects is good but longer term was more doubtful.
They want more “clarity” from government on what its aspirations are for the sector in the 2030s.