Wind News

Monday 21 July 2008

The London Array is now back on track to install 1GW of capacity in the Thames Estuary

The two existing partners within the troubled London Array offshore wind farm have today announced their intention to buy out Shell's 33% stake for an undisclosed sum.

German-owned power giant E.ON and Danish utility DONG Energy will become 50:50 partners in the £1.5 billion project, which is to install 341 turbines in the Thames Estuary.

Once complete, the 1GW wind farm will generate the equivalent power to provide the electricity needs for a quarter of London's homes.

Oil firm Shell decided to pull out of the London Array at the end of April, to concentrate its wind energy investments in North America.

Announcing the new financial arrangements for the project today, E.ON UK chief executive Dr Paul Golby said: "We're pleased that, together with DONG Energy, we've been able to secure the future of the project, and we'd also like to thank Shell for their contribution to the project's significant progress to date."

A statement from DONG Energy said the company was pleased to be able to continue with the development of the project in collaboration with E.ON, and that a swift solution had been reached with Shell "to the benefit of the project".

Dr Golby said the settling of the project's ownership now means it is on track for the first phase to be completed by the end of 2012.

Location of the future London Array wind farm in the Thames Estuary

However, this is subject to a number of "important" contracts being agreed - not least for the turbines themselves.

All of the major consents required for both the offshore and onshore elements of the project have been secured, and the tender process for the major construction contracts was started earlier this year. The project has adopted a multi-contract approach, with a number of major contract packages covering different elements of construction.

A pre-qualification exercise is being carried out for each package to select suitable contractors for a competitive tendering exercise, with the tender process expected to take until the end of 2008.

Lessons learned 

E.ON said that the lessons it has learned from the London Array project would help future projects to run more smoothly - and could potentially help it to develop even larger offshore wind farms.

Mike Lewis, managing director E.ON Climate & Renewables in Europe, said: "While the economics of this project remain challenging, we believe this flagship project will give us invaluable experience as we go forward with the next generation of offshore projects."

Shell has committed to leave its staff in the project until the end of the year to enable a smooth transition and handover.