Norway's Statkraft ceases new offshore wind investments

* Dividend policy change triggers cut in investments

* Says will not invest in Dogger Bank, Triton Knoll

* Says will stick to earlier agreed investment in Dudgeon (Adds quotes from RWE (Xetra: 703712 - news) , Forewind, details on UK offshore wind)

By Nerijus Adomaitis and Karolin Schaps

OSLO, Dec 16 (Reuters) - Norwegian utility Statkraft will cease investing in new offshore windfarms, including the world's biggest project off the coast of Britain, so it can continue paying dividends to its government owners despite a slump in Nordic power prices.

The decision announced on Wednesday is a blow to Britain's plans to maintain its status as the world's biggest offshore wind market, with plans to double offshore wind energy capacity from the current 5 gigawatts (GW) by 2020.

However Statkraft said it had changed its investment plans due to the Norwegian government overturning an earlier decision to allow the company to retain 5 billion crowns ($574 million) in dividends to support new investments.

The company's revenue has been hurt by low Nordic power prices, which fell to a 15-year low of 13.4 euros per megawatt-hour (MWh) in the third quarter.

"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-Toennesen.

Statkraft said it will not invest in Dogger Bank, expected to be the world's biggest offshore wind farm, and Triton Knoll, both off the east coast of England, although it would stay for the development phase.

A spokesman for British green energy lobby group RenewableUK said Statkraft's decision was disappointing but he expected others to take its place.

The Dogger project is being developed by a group dubbed Forewind which also includes RWE, SSE (LSE: SSE.L - news) and Statoil (Xetra: 675213 - news) . The group said it had consent for four 1.2 gigawatt (GW) projects and it was up to its members to determine the next steps forward.

Triton Knoll is being developed by Statkraft and RWE. The later said it expected the project to go ahead. "Triton Knoll remains one of the most competitive projects in UK waters and both partners remain committed to ensuring its success," said a spokesman for RWE Innogy UK.

Offshore wind is one of the more expensive forms of renewable energy because turbines are sited far out at sea. The British government recently said conditions for qualifying for subsidies would become much stricter as it tries to rein in costs.

Statkraft may also postpone some overseas hydropower projects, including two in Chile, spokesman Knut Fjerdingstad said.

Fjerdingstad added Statkraft will honour already agreed investment in the Dudgeon wind farm, which it is developing with Statoil and Abu Dhabi's Masdar, and will stay as operator of the Sheringham Shoal wind farm, its biggest investment in Britain so far. ($1 = 8.7125 Norwegian crowns) (Additional reporting by Ole Petter Skonnord in Oslo; Editing by David Holmes)