UK Offshore Wind Industry’s Pain to Last Years, Hedge Fund Says

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The UK’s once-booming offshore wind industry faces years of pain, including project delays and possible cancellations, due to soaring costs and higher interest rates.

That’s the view of Per Lekander, chief executive of Clean Energy Transition LLP, a London-based hedge fund that manages $2.6 billion in assets in sectors including renewables, utilities, oil and gas.

During a prolonged period of low interest rates before the pandemic, investment in UK wind capacity did in fact surge — to the point where it has surpassed natural gas primary source of power connected to the grid. Sustained inflation, and the effort to stop it, now threatens to stop that growth in its tracks.

“The world came out of Covid-19 and suddenly this 15 years of deflationary situation rapidly changed,” he said. Many companies that secured projects during an industry growth spurt in 2019-2021 are “now dramatically out of money.”

 

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