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Energy firm cancels £4bn offshore wind farm as politcal climate worsens

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The future of green energy in Britain is under threat after the German owned RWE npower pulled out of a plan to build one of the world’s largest offshore windfarms – the £4bn Atlantic Array project in the Bristol Channel. The announcement came weeks after the company accused the government of treating environmental subsidies like a ‘political football’ and days after David Cameron was quoted as saying that ‘green crap’ needed to be got rid of from energy bills. The creation of thousands of new jobs may be suspended indefinitely

With David Cameron posing for photos in the Arctic a distant memory, and his pledge to be the ‘greenest government ever’ seemingly up in smoke and turning into a greenhouse gas, Britain’s environmental targets look under threat.

It’s a complex story though. The Big 6 energy companies, of which RWE is one has decided to blame ‘green levies’ for exponentially rising energy prices. These levies are added to energy bills in order to help finance the transition from fossil fuels to renewable energy – indeed to help finance projects such as the Atlantic Array wind farm. The implication therefore is that with the Prime Minister talking about ‘green crap’, the energy company felt that a populist move could result in this tier of financing falling away from the project – something they were not prepared to risk.

The only slight flaw in this argument is that green levies make up about 9% of bills. While the latest figures reveal that energy firms saw their profits grow by 77% per customer last year and have risen fivefold since 2009. Which does beg the question of exactly who is using the green levies as a political football and whether energy companies are holding government to ransom for subsidies despite booming profits.

The Departtment of Energy and Climate Change said: “The decision not to proceed with the development is a matter for RWE. It was made on purely technical grounds and reflects the many complex challenges of constructing offshore windfarms.”

"The UK still expects to deploy significant amounts of offshore wind by 2020 and we remain well placed to meet our 2020 renewable energy target.

Written by Cyrus Bozorgmehr - Google+ Profile - More articles by Cyrus Bozorgmehr

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