Natural Energy plan downsized as wind farm giant slashes cost

Plans to build hundreds of wind farms were thrown into disarray last night after the world’s biggest investor in wind power said that it was slashing its investment programme in Britain.

The decision comes less than two months after ministers backed a string of huge gas-fired power stations, prompting concern that the Government cannot deliver on its promise of a green energy revolution.

Iberdrola Renewables’ decision to cut its investment here by more than 40 per cent, or £300 million – enough to build a wind farm powering 200,000 homes – is the latest blow to Gordon Brown’s target of generating 35 per cent of Britain’s electricity from renewable sources by 2020.

Lifting it to that level from the current 5 per cent will cost an estimated £100 billion. But wind energy investments have collapsed as funding dries up in the credit crunch and the price of oil, gas and coal has fallen. Delays obtaining access to the national grid and planning permission have compounded the industry’s woes.

“We are way off the pace,” said Jonathon Porritt, the head of the Sustainable Development Commission. “The UK has talked about this for years but the Government now has very little time to get this together. People just do not consider the UK to be a good place to invest in renewables.”

Shell said this month that it was pulling out of all new investments in wind and solar energy. Last year it withdrew from London Array, a £3 billion project to build 341 turbines in the Thames Estuary. Questions have also been raised over the future of npower’s £2.2 billion Gwint y Mor farm off the Welsh coast. BP shelved plans in November for a wind farm on the Isle of Grain, in Kent, and said that it had no plans to invest in other renewable energy projects in Britain.

Duncan Ayling, of the British Wind Energy Association, said: “We need strategic leadership from the highest levels . . . We are only going to do this if the Government is brave enough to tackle these problems head on.”

A recently approved gas-fired station in Pembroke will be the largest in Britain, producing 2,000 megawatts, two thirds of the total produced by all of Britain’s wind turbines put together.

Xabier Viteri, chief executive of Iberdrola Renewables, whose Spanish parent owns ScottishPower, blamed the economic crisis for the cutback, but added that problems in Britain threatened to force his company to consider investing elsewhere.

Ed Miliband, the Energy Secretary, described opposition to wind farms this week as “socially unacceptable . . . like not wearing your seatbelt or driving past a zebra crossing”.