Thames windfarm project gets boost

By Chris Bryant in Berlin
Published: October 16 2008 15:28

Plans to construct the world’s largest offshore windfarm in London’s Thames estuary received a much-needed boost on Thursday after Abu Dhabi acquired a stake in the project through Masdar, its renewable energy initiative.
E.on, the German energy giant, sold 40 per cent of its half share in the London Array project for an undisclosed sum. The deal leaves E.on owning 30 per cent of the project, Masdar with 20 per cent and Denmark’s Dong Energy controlling the rest.

The British government signalled its approval of the deal which may put the 271-turbine project on a surer footing after a difficult few months.
The viability of the scheme was thrown into doubt in May when Royal Dutch Shell pulled out and E.on declared that the economics of the deal were “marginal at best”.
The cost of the project has more than doubled to around £2.5bn over the past five years as a global rush to wind energy has pushed up the cost of components.
E.on’s chief executive Wulf Bernotat said the project was set to raise “important challenges”, adding that “the lessons we learn will be vital for the development of the next generation of offshore projects.”
If constructed, the London Array could generate 1,000 megawatts of power, enough electricity to power around 750,000 homes and representing a big contribution towards a EU target of generating 20 per cent of energy from renewable sources by 2020.
The UK’s share of this target means it must generate about 40 per cent of its electricity from renewables. The importance attached to offshore schemes has increased as plans to construct onshore wind farm have stalled because of planning objections.
“This is an excellent example of the partnership we need between oil producing and oil consuming countries to develop new energy sources and technologies,” British prime minister Gordon Brown said.
E.on plans to invest €6bn in renewable energy projects by 2010 and indicated that it would announce further joint ventures with Masdar in the coming months.
Masdar represents an ambitious and expensive bid by Abu Dhabi to become a leader in the renewable energy sector. Earlier this year its sovereign wealth fund Mubadala Development Company said it would invest $15bn in the the sector, including plans to construct world’s first carbon neutral city.
Copyright The Financial Times Limited 2008