European utilities acquire Shell's stake in world's largest offshore windfarm

Terry Macalister
The Guardian,
Tuesday July 22, 2008

The world's biggest offshore windfarm was put back on track yesterday as 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.
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 windfarm, which could supply electricity to more than 750,000 homes in Greater London from the windfarm off the coast of Kent.
Paul Golby, chief executive of E.ON UK, who was angry when Shell first announced it wanted to pull out, 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 windfarm in Europe - planned for the 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.
On a visit to unveil a new renewable energy centre in Blyth, Northumberland, the energy minister, Malcolm Wicks, said the north-east's traditional manufacturing expertise could be utilised in the green energy sector.
"Offshore wind will play a significant role in helping us meet our challenging targets for a massive increase in the amount of energy generated from renewables.
"With our plans to increase the financial support for offshore wind, it is evidence of our commitment to make the UK one of the most attractive places to invest in green energy," the minister said
He said the Californian energy group Clipper Wind planned to develop the world's largest wind turbine - almost 10 times taller than Gateshead's Angel of the North - at the Blyth centre.