The ten megawatt windfarm received the green light from authorities three years ago and was being developed with the Arts Factory.
Danny Shaw, head of new business at E.ON, said: "We certainly didn't take this decision lightly but, as a responsible developer, we simply wouldn't be willing to build a scheme that we thought had the potential to exceed acceptable noise limits."
He added that while the project was "no longer viable" for the company, it may still interest other developers.
E.ON is the second largest electricity generator in the UK and has around eight million customers.
The company is also the sponsor of the FA Cup and an official partner of the Tour of Britain.
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