LONDON (Reuters) - Swedish state-owned utility Vattenfall VATN.UL expects to enter its Norfolk wind projects, off the east coast of England, into Britain’s auctions for renewable subsidies, its CEO told Reuters.
Vattenfall plans to build two 1.8 gigawatt (GW) offshore wind projects, Norfolk Vanguard and Norfolk Boreas, which together could power around 2.6 million homes.
“We would expect to enter the Norfolk offshore wind projects in the future, but an auction next year would come too soon,” Vattenfall CEO Magnus Hall said in a phone interview.
Vattenfall expects to submit a planning application for the Norfolk Vanguard project next month, and said both plants could be generating power by the early to mid-2020s.
Britain’s latest subsidy auction cleared earlier this month with a lowest price of 57.50 pounds per megawatt hour, after the cost of offshore wind fell around 50 percent compared with the previous auction in 2015.
“If you want to compete you have to be competitive at those levels,” Hall said.
Vattenfall is also set to make a decision on whether to extend the life of its Ringhals 3 and 4 nuclear reactors in Sweden in the next few months.
Sweden has started a two-year phasing out of its tax on nuclear power production, which many nuclear energy producers, including Vattenfall, said had created losses and halted investments.
However, Hall said removing the tax did not automatically make the case for keeping the units open.
“The price environment we are operating in is quite challenging, so even if you take out the nuclear tax we must bring down other operational costs,” he said.
“The decision is about understanding the economics of keeping the nuclear plant running for the next 20-25 years.”
Vattenfall plans to decommission the Ringhals 1 and 2 reactors, while the company has said it would extend the life of its Forsmark 1, 2 and 3 reactors in Sweden.
Reporting By Susanna Twidale; Editing by Susan Fenton