EnBW Abandons UK Offshore Wind Projects, Records €1.2 Billion Impairment
German utility exits Mona and Morgan developments after failing to secure UK subsidy support, citing higher costs and market pressures
German energy company EnBW has announced that it will withdraw from two major offshore wind farm projects in the United Kingdom and book a €1.2 billion impairment charge as a result of its decision.
The assets, known as Mona and Morgan and developed in partnership with JERA Nex BP — a joint venture between BP and Japan’s JERA Co — had a combined potential capacity of around three gigawatts but failed to secure government support in the latest UK offshore wind contracts-for-difference auction, undermining their economic case.
EnBW cited several adverse factors in its decision, including sharply increased supply chain costs, subdued electricity market prices and higher interest rates, as well as unspecified project implementation risks that have eroded future value beyond acceptable levels.
These non-operational charges will not impact the company’s cash flows, EnBW said, and it confirmed its existing financial outlook for 2025 despite the impairment.
The two projects’ cancellation marks a setback for UK offshore wind development amid broader challenges facing the sector, including inflationary pressures and tightening financing conditions that have already contributed to other high-profile project cancellations.
EnBW has invested approximately £840 million in lease and development costs to date and will make no further payments on the ventures.
JERA Nex BP, however, indicated that it still sees “good pathways to delivery” for portfolio opportunities in the UK and is assessing its options for the future.
The partnership had originally secured the seabed rights for the sites in 2021, positioning the projects as significant contributions to the UK’s ambitious offshore wind expansion plans.
The UK government has concurrently moved forward with its renewable energy strategies, making available bonus incentives for successful bidders in the recent auction to stimulate supply-chain investment and overall capacity growth across the sector, even as some developers recalibrate to shifting economic conditions.
The assets, known as Mona and Morgan and developed in partnership with JERA Nex BP — a joint venture between BP and Japan’s JERA Co — had a combined potential capacity of around three gigawatts but failed to secure government support in the latest UK offshore wind contracts-for-difference auction, undermining their economic case.
EnBW cited several adverse factors in its decision, including sharply increased supply chain costs, subdued electricity market prices and higher interest rates, as well as unspecified project implementation risks that have eroded future value beyond acceptable levels.
These non-operational charges will not impact the company’s cash flows, EnBW said, and it confirmed its existing financial outlook for 2025 despite the impairment.
The two projects’ cancellation marks a setback for UK offshore wind development amid broader challenges facing the sector, including inflationary pressures and tightening financing conditions that have already contributed to other high-profile project cancellations.
EnBW has invested approximately £840 million in lease and development costs to date and will make no further payments on the ventures.
JERA Nex BP, however, indicated that it still sees “good pathways to delivery” for portfolio opportunities in the UK and is assessing its options for the future.
The partnership had originally secured the seabed rights for the sites in 2021, positioning the projects as significant contributions to the UK’s ambitious offshore wind expansion plans.
The UK government has concurrently moved forward with its renewable energy strategies, making available bonus incentives for successful bidders in the recent auction to stimulate supply-chain investment and overall capacity growth across the sector, even as some developers recalibrate to shifting economic conditions.
