SSEZY SSE PLC (PK)

By Kjetil Malkenes Hovland

OSLO--Norway's state-owned utility Statkraft said Wednesday that it would stop planned investments in new offshore wind projects off the U.K. after the Norwegian parliament reversed a planned capital injection.

"Offshore wind power is capital intensive. The reduced financial terms from the owner entail that it is not possible for Statkraft to invest in new offshore wind projects," said Statkraft Chief Executive Christian Rynning-Tønnesen.

Statkraft said it would continue to develop massive U.K. offshore wind projects, including the 4,800-megawatt Doggerbank project and the 900-megawatt Triton Knoll project along with partners including Statoil ASA (STO), SSE PLC (SSE.LN) and RWE AG (RWE.XE), but that it may have to exit those projects at a later stage due to a lack of capital.

The company said it would remain a partner in the 317-megawatt Sheringham Shoal offshore wind project, which started production in 2012, and that it would continue its investments in the 402-megawatt Dudgeon offshore wind project, which is under development. Both are in U.K. waters.

The Norwegian parliament agreed in 2014 to boost Statkraft's equity by 10 billion Norwegian kroner ($575 million), including NOK5 billion in reduced dividends, in a bid to boost its global renewable energy investments. Last week, parliament reversed the decision to reduce dividends, as part of a 2016 budget deal.

Statkraft's announcement comes at a time when global renewable energy investments are expected to increase, following a global climate agreement in Paris that sets ambitious targets to cut carbon emissions.

Some of Norway's opposition parties warned against the move, saying that the state should be a long-term owner and avoid using company dividends as a tool to balance budgets.

Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com

(END) Dow Jones Newswires

December 16, 2015 04:33 ET (09:33 GMT)

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