Infinis Energy Plc, a renewable-power developer backed by Guy Hands’s private equity company, said it won’t build two wind farms until Scotland decides whether it will remain part of the U.K.
The wind farms together would have a capacity of almost 100 megawatts, accounting for more than half the company’s 130 megawatt to 150 megawatt 2017 target. It won’t begin construction until the results of a referendum set for Sept. 18 are announced, Northampton-based Infinis said in a statement.
The remark in an earnings statement from Infinis is a rare admission by a public company that the political decision about Scotland’s future is having an impact on business. Polls suggest there’s enough undecided voters to swing the referendum in favor of breaking up Scotland’s 300-year old union with England, Wales and Northern Ireland.
Scottish independence risks undermining investment in low-carbon energy because the smaller nation wouldn’t be able to afford the same level of subsidies as Britain combined, the U.K. Department of Energy and Climate Change said in April. Power bills would have to rise to pay renewables subsidies to local generators.
“The sole cause of any delay to investment in energy projects at the moment is the complex and slow moving package of energy market reforms being led by the U.K. government,” a Scottish government spokeman said today by e-mail. “In fact, several companies have said they believe the contract for difference mechanism is defective.”
Infinis exported power equivalent to 5.7 percent of the U.K.’s total generation from renewables in the year through March 31. Its operating wind portfolio has capacity of 274 megawatts, and it also produces electricity from landfill gas.
While its landfill gas facilities contributed 71 percent of its total exported power, electricity from onshore wind grew almost 50 percent, representing 28 percent.
Onshore wind is one of the cheapest forms of clean energy, with prices comparable with coal-fired power. Wind costs about $84.8 a megawatt hour versus $82 for the fossil fuel, according to data compiled by Bloomberg. The U.K. intends to expand renewable energy to meet 15 percent of demand in 2020 from about 9.4 percent now.
Infinis raised 234 million pounds in its November initial public offering with Hands’s Terra Firma Capital Partners Ltd. retaining a majority.