EnBW cancels two UK offshore wind farms, incurring $1.4 billion in impairment

EnBW, the German utility, announced on Thursday that it would take a 1.2 billion euro ($1.4 billion) impairment charge for scrapping two British wind projects. This was a direct result of losing a UK offshore tender.

In this week's record-breaking auction, the?two offshore projects -- Mona & Morgan -- with a total potential capacity of 3 Gigawatts -- did not qualify for any government assistance via contracts for difference.

The?two?projects are?being developed jointly with JERA Nex bp. This is a joint venture 50/50 between British oil giant BP and Japan’s JERA.

EnBW stated that the decision to halt the project was based also on other factors, "including a significant increase in costs throughout the supply chain and lower electricity market prices".

EnBW is owned by the German state of BadenWuerttemberg, and other municipalities. The company also mentioned unspecified "project implementation risks" and added that the charges would not impact cash flow because they were non-operational. Reporting by Christoph Steitz Editing Madeline Chambers

(source: Reuters)