UK Announces Winners of Huge Offshore Wind Tender
January 08 2010 - 6:50AM
Dow Jones News
The U.K. Friday took a step forward in boosting offshore wind
power capacity, enhancing energy security and meeting emissions
targets as it announced successful bidders to develop 32 gigawatts
of offshore wind energy.
The cost of developing the new generation capacity could require
investment of around GBP100 billion, according to the Crown Estate,
owner of the U.K. seabed. Ahead of Friday's announcement, it was
expected that 25 GW of new offshore wind capacity would be
awarded.
Winners of the nine sites off the U.K. coast--the world's
largest offshore wind tender to date--included major European
utilities such as RWE AG (RWE.XE), E.ON AG (EOAN.XE), Centrica PLC
(CNA.LN), Scottish and Southern Energy PLC (SSE.LN), Iberdrola SA
(IBE.MC), Vattenfall, EDP Renovaveis (EDPR.LB), and others such as
Statoil (STO), Siemens AG (SI) and Fluor (FLR).
U.K. Prime Minister Gordon Brown said the announcement would
provide a substantial new platform for investing in U.K. industrial
capacity.
"The offshore wind industry is at the heart of the U.K.
economy's shift to low carbon and could be worth GBP75 billion and
support up to 70,000 jobs by 2020," Brown said.
The largest development will be in the Dogger Bank zone, where 9
GW of generation is to be installed by a consortium equally owned
by each of SSE Renewables, RWE Npower Renewables, Statoil (STO) and
Statkraft (SKT.YY).
The scale of the challenge is significant. Wind farm developers
face engineering and technology challenges as well as massive costs
from an industry still in its infancy, developers and analysts have
said.
Sarwjit Sambhi, managing director of gas and electricity
supplier Centrica said the sector would need a long-term stable
support mechanism to make the investments commercially viable.
"Round 3 should send a strong signal to the renewables supply
chain in the U.K. and a suitable support mechanism would
incentivize its creation to increase competition, reducing costs
and creating thousands of new jobs," Sambhi said.
Centrica was Friday awarded exclusive rights to develop 4.2 GW
in the Irish Sea zone.
The Round 3 tender significantly boosts the amount of offshore
wind capacity to be installed in the U.K. Capacity put up for
development in the Round 1 and 2 tenders totaled 8 GW.
-By Selina Williams, Dow Jones Newswires +44 207 842 9262;
selina.williams@dowjones.com
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