Tumbling prices have forced wind developer Renewable Energy Generation (REG) to pull out of its turbine agreements.

The company has reported losing £2.9 million in deposits paid out for turbine orders, but told investors its “prudent” move would actually bring cost savings, reported newenergyfocus.com. The firm pulled out of an undisclosed number of turbine orders “as a result of the sudden and rapid deterioration in credit markets”.

The company stated that these turbine orders will be replaced potentially at lower prices and better availability as a result of the recent improvements in the turbine market conditions.

In its trading update, REG shared that it has 61MW of wind plant in full production and is moving into a new power purchase agreement in the UK from April 1 which will increase power pricing by 37 percent for the next two years.

In its update, the company also referred to the announcements made by the Ontario Minister of Energy about a new Green Energy Act that will replace the existing RFP process and the company believes that this should lead to higher tariffs for the company’s Canadian projects and accelerated implementation. In light of the potential which this offers, to develop its larger projects at a faster rate than originally envisaged, the company has brought forward development expenditure on them. Consequently, the budgeted expenditure for the full year of £1 million on these projects has been incurred in the first half, which has impacted the operating results of the first half by approximately £1 million. These costs will not be repeated in the second half of the year.

Andrew Whalley, CEO, REG, said the environment for REG has improved markedly over the last three months. “We have relatively little debt compared with other companies in the sector and this affords us the flexibility to selectively use long term project finance to fund the growth of our wind portfolio,” he said.