Orsted has said it is disappointed by the UK government’s Spring Budget and will need to take time to analyse its impact on the 2852MW Hornsea 3 offshore wind farm in the North Sea.
The Danish developer warned earlier this month that plans to build the project are “at risk” unless the government offers tax breaks to offset soaring costs.
Orsted head of UK and Ireland Duncan Clark told The Times that the project “would have to go on hold” if it did not receive the additional support by the end of April.
Hornsea 3 received a 15-year strike price of £37.35 per-megawatt hour in the government’s 2022 Contracts for Difference auction, though some of the winning developers now claim the bids did not factor in rising inflation and supply chain pressures.
Chancellor Jeremy Hunt’s Budget did not contain any new incentives for offshore wind, although it left the door open for further net zero announcements before the end of March.
An Orsted spokesperson said: “It is disappointing that the Government has not put in place a full package of support for the renewables industry in the Spring Budget. Under the government’s proposals, we understand long-life infrastructure projects such as offshore wind farms would only qualify for a 50% capital allowance for three years. Furthermore, the lion’s share of capital expenditure on Hornsea 3 and other forthcoming offshore wind projects will come outside the qualifying scope and timeframe.
“We will now need to take some time to analyse the anticipated impact of these proposals on our future projects. We remain committed to doing all we can to reach Final Investment Decision on Hornsea 3, a project Orsted has been developing for more than a decade and which will deliver up to 2.8GW of clean, secure affordable power for UK homes and businesses.
“Our Hornsea 3 project team, together with our supply chain partners, will continue to seek creative solutions that we hope will allow us to green-light Hornsea 3 in the future, realising an £8bn investment in the UK with thousands of jobs during construction and billions invested in the UK supply chain.”