EnBW Incurs $1.4b Impairment Charge After Pulling Out of UK Wind Farms

German utility EnBW said on Thursday it was taking a 1.2 billion euro ($1.4 billion) impairment charge after pulling out of two wind projects in Britain, a direct consequence of losing out in a landmark UK offshore tender.

The two offshore wind projects - Mona and Morgan - with a potential total capacity of 3 gigawatts did not qualify for government support via so-called contracts for difference in this week's record auction, EnBW said.

The two projects were being jointly developed with JERA Nex bp, a 50-50 joint venture between British oil major BP and Japan's JERA Co.

EnBW said the decision to pull the plug on its participation in the projects was also based on other factors "including a significant increase in costs across the supply chain, lower electricity market prices and higher interest rates".

EnBW, which is mostly owned by the German state of Baden-Wuerttemberg and related municipalities, also referred to unspecified project implementation risks, adding that the charges were non-operational and would therefore not affect cash flows.

JERA Nex bp, in an emailed statement, said it believed