It cited “technical challenges making the project uneconomic”. These challenges are “significant, including substantially deeper waters and adverse seabed conditions”, the firm said. “Costs to overcome such technical challenges are prohibitive in current market conditions.”
While the news could be seen as a setback for the industry, the Crown Estate, which agreed to terminate its agreement with RWE Innogy, said the news was a “positive development” showcasing the maturity of the wind industry.
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 investment opportunities”, said Huub den Rooijen, the Crown Estate’s head of offshore wind. With firm experience behind it, the industry now has a “much deeper understanding of the characteristics of successful projects”, he said. “We will see further attrition in the time to come.”
Dr Gordon Edge, director of policy at trade association RenewableUK said RWE Innogy’s decision should not be blown out of proportion:
“This is just one of a number of offshore wind farm projects in UK waters,” he said. “We already have 22 offshore wind farms operating successfully, providing electricity for two and a half million households. Four more are under construction right now, a further eight have been approved and another dozen are awaiting consent. That means that the current pipeline of projects gives us the potential to have 20 gigawatts of wind energy installed in UK waters – more than five times as much as we have now – and that’s just the start.” He stressed: “It’s important that we focus on the most economic of sites.”
Victim of green levy row?
Others are unconvinced by the claim the project has been withdrawn on technical grounds, suggesting instead that the project has fallen victim to backlash against green taxes that has grabbed hold of the UK. With the country’s Government having given up its initial defense of green support subsidies and agreed to cut green levies on utility bills, critics say this is the first major sign of the impact.
"The Government's wanton green-bashing is starting to cost jobs and threaten the future security of our energy supply,” Friends of the Earth's head of campaigns, Andrew Pendleton, told the BBC. "The UK has some of the finest offshore clean energy resources in the world and harnessing it is becoming cheaper. But anti-green ideology at the heart of the coalition is sending the development of world-beating clean power into reverse."
Meantime, the many local and environmental opponents to the Atlantic Array project, including a group called “Slay the Array” welcomed the news. “It was the wrong place for a project of this size and would have dramatically altered the character of our coast,” Rodney Cann, lead member of environment at North Devon Council, told the North Devon Journal. “This is a really lucky escape but we must not be complacent as this proposal could well be resurrected in the future.”
He added: “Let's forget the Array and look to logical alternatives such as wave and tidal power that are not too far from being a real viable alternative to wind power without the impact on our environment.”
RWE Innogy says it will now focus on progressing other offshore wind projects which are "economically viable" instead:
“This is not a decision we have taken lightly,” insisted Paul Cowling, director of offshore wind at RWE Innogy. He stressed that the company was not turning its back on the UK or offshore wind. “We will continue to focus on other less technically challenging offshore projects within our offshore pipeline of up to 5.2GW.”
The company will complete the Gwynt-Y-Mor project in the UK next year. “At 576MW this will become the second largest operating offshore wind farm in the world,” Cowling noted. The firm is also developing the Galloper and triton Knoll offshore wind projects off the UK’s east coast.
The news certainly highlights the need for the industry to speed up development of new technologies to enable exploitation of deep water sites. RWE Innogy said it hopes that will happen naturally over the next decade which would then “open up opportunities in more challenging areas, such as in the Bristol Channel”.
RenewableUK’s Dr. Edge says wind turbine technology “is evolving extremely rapidly, so it’s reasonable to expect that sites which aren’t viable now will become so in the future”.
The Crown Estate says it has no plans to undertake further work on the Bristol Channel Zone for the foreseeable future. Whether that will change with the site opened up for grabs to other developers remains to be seen.
Meantime, the UK’s first floating wind farm is set to be located off the Scottish coast following an announcement that the Crown Estate has granted an agreement for lease to Statoil for the next phase of its Hywind project.