LONDON (Alliance News) - Renewable Energy Holdings PLC Wednesday said there is "serious doubt" that its Welsh wind farm will be granted planning permission, and the company faces difficulty in securing financing for the project should it be approved due to the current outlook for renewable energy.
Renewable Energy Holdings shares were down 7.0% to 1.00 pence per share on Wednesday.
The company reported a GBP774,000 pretax loss in the first six months of 2015, widening from a GBP633,000 loss a year earlier, as its finance costs and administrative expenses increased.
The company is currently focused on the planning application for the Mynydd y Gwynt windfarm project in mid-Wales and on trying to sell its Polish windfarm project. The decision regarding the planning permission for the Welsh windfarm is expected before November 20.
"We have previously reported that if consent is granted, the windfarm would need to be connected to the proposed mid-Wales hub substation. However the outcome of the mid-Wales conjoined public inquiry has thrown the future of that substation into serious doubt. The inquiry considered five proposed wind farms in mid Wales, with four of them connecting to the hub, but DECC has refused planning consent for all four," it said in a statement.
That doubt follows on from the UK government's decision to end or reduce the subsidies from which renewable energy companies currently benefit.
"The status of our project in relation to this statement and its eligibility for subsidy is unclear. Whilst the consent decision will be made this year, the grid substation delays mean it probably will not be connected before 2020," it said.
In terms of its attempts to sell its Polish wind farm, the company said it has failed to attract a buyer and said the macro-environment has not "helped stimulate the market".
Th company said it has enough funds to last until a planning decision is made, but if the wind farm gets the go ahead then it will have to seek further funding.
"However factors such as the grid situation in mid Wales and assessments of the likelihood of qualifying for any financial support mechanism for onshore windfarms will all be considered together with the company's current indebtedness by any potential funder. If no further funding were to be available the group would likely commence liquidation," it said.
Copyright 2015 Alliance News Limited. All Rights Reserved., source Alliance News