European utilities acquire Shell’s stake in world’s largest offshore wind farm
The world’s biggest offshore wind farm has been put back on track after the UK energy minister boasted that the technology could attract £3bn investment to the north-east of England alone. A host of wind schemes have been hit by planning delays, cost-inflation fears and opposition from the Ministry of Defence over concerns that turbines damage the efficiency of local radar.
However, the German-based energy group E.ON and the Danish utility Dong Energy have agreed to acquire Shell’s 33% stake in the 1,000-megawatt London Array scheme for an undisclosed sum. The firms, which each own a one-third stake, are to become 50-50 partners in the wind farm, which could supply electricity to more than 750,000 homes in the south east of England.
Paul Golby, chief executive of E.ON UK, said: “We hope to be able to keep the project on track and we should be able to complete the first phase by the end of 2012, subject to securing a number of contracts, such as those for the wind turbines.”
The purchase is a major relief for the government and came on the day the biggest onshore wind farm in Europe – planned for the River Clyde – was given the green light by ministers. John Hutton, secretary for business, welcomed the deal, saying: “It is great news that E.ON and Dong Energy will be taking this exciting project forward.”
Shell decided to withdraw from the project in May after a strategic review saying it did not meet its financial rates of return. Industry-wide cost inflation brought about by the oil price boom has raised the cost of the project to more than £2.5bn, way above the original estimates of £1.5bn three years ago.