Welcome to the next little crisis in the UK energy world: the offshore windfarm industry is being blown off course. No, not because of the cost of leasing seabed plots from the crown estate. Rather, an inflationary gale is blowing through supply chains, upsetting the old and comforting notion that the cost of getting the turbines spinning always falls in real terms.
The decision by Vattenfall to halt work on a big project off the coast of Norfolk is significant for what it says about how far the economics of new wind development have shifted in the space of a year. The state-owned Swedish company calculates that it is better to take a financial hit of 5.5bn Swedish krona (£415m), covering the work it has done so far on the Norfolk Boreas development, than plough on.
