A subsidiary of energy firm RWE Npower is set to scale back its investment in clean energy amid rising costs, debts and uncertain government policies.
Innogy, whose parent company is the German utility, announced it would be reducing its stakes in the Galloper and Triton Knoll offshore wind farms projects from 50% to 25%, as well as selling the £200m Markinch biomass plant in Fife, Scotland.
RWE chief Paul Coffey said the company was likely to seek external funding partners in the future, instead of being a direct investor.
“RWE used to be a company that pretty much wanted to own 100% of everything we were involved in”, he said.
“We need to find ways of making our money go further which means we own less, or we don’t own at all the things we develop and we set them free to other people who wish to own them and have the ability to do so.”
He added, “[The old model] is dead, it really is genuinely dead, and it will become more dead as we move forward. The energy landscape is changing so rapidly that I can’t see it going backwards.”
RWE said it hopes to reduce its huge debts, accumulated after Germany decided to shut down its fleet of nuclear power plants in the wake of the Fukushima disaster in Japan. Coffey said that RWE wanted to become a trusted partner and therefore was forced to get its budget back on track.
However, he admitted that the uncertainty and delays by the UK government around the Electricity Market Reform programme also contributed to the decision.
Despite Innogy’s announcement in the wind and biomass sectors, RWE Npower said plans to convert a 400MW coal-fired power station in Northumberland to biomass remain on track.
RWE has already shut down a former coal-fired power plant that was turned into a biomass facility at Tilbury on the Thames because of a lack of financial support from the government.
In November last year, the company also shelved the 1,200MW Atlantic Array offshore farm, blaming the “technological challenges and market conditions”.
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