Scots wind farm winners named

By Fiona Harvey and Andrew Bolger
Published: February 17 2009 00:27

Nine companies and consortia were chosen on Monday to develop the first major offshore wind farms at 10 sites off the coast of Scotland, in a boost for ministers’ plans to develop offshore turbines.
The proposed wind farms would be capable of generating a total of about 6 gigawatts of power. The biggest project is for a 1.5 gigawatt array of turbines off the coast of Argyll by ScottishPower Renewables, now owned by Iberdrola, the Spanish energy group.

Another major winner was Airtricity, the renewable subsidiary of Scottish & Southern Energy, which was granted agreement to develop wind farms in the Moray Firth’s Beatrice Field, and off Bell Rock, Islay and Kintyre, with a combined capacity of up to 2,700 MW.
The Crown Estate, which is responsible for the seabed around the UK’s coastline, said it would take about a year for an environmental impact assessment to be completed around the Scottish coast, which must happen before the development of the sites can take place.
Sites around the English and Welsh coasts are being dealt with separately, in a bidding process that will see bidders come forward in early March.
The government published a study a few weeks ago which found that there were suitable sites around the UK likely to be capable of generating about 25GW of offshore wind power, which is in line with the government’s targets. The UK must generate 14 per cent of its energy from renewable sources by 2020, in order to meet European Union targets, and ministers have put offshore wind at the centre of this ambitious £100bn investment plan, despite the fact that the UK has only about 0.5GW of offshore wind at present.
Offshore wind holds more allure than other renewables for ministers because of the difficulty of overcoming local objections to onshore wind farms, and because other renewables – such as tidal and wave power – are at an earlier stage of development.
However, serious doubts have been thrown on the economic viability of offshore wind power by a series of recent developments.
Paul Golby, chief executive of Eon UK, told the FT recently that the economics of the world’s biggest proposed offshore wind farm, the London Array, were “on a knife edge” because of spiralling costs and inadequate incentives. Shell, originally a partner in the project, pulled out of the wind farm last year, citing high costs, and BP also shelved its plans for offshore wind in the UK. Centrica is reconsidering its offshore plans.
Offshore wind is about twice as expensive per megawatt of electricity as its onshore counterpart. The costs are driven by the difficulty of siting turbines in deep water, the more robust generation equipment needed and the greater wear and tear and need for maintenance. There is even a dire shortage of the barges needed to tow out and install the turbines.
But under government plans that will come into force in April, offshore wind will qualify for only 1.5 times the subsidy given to onshore wind.
Offshore generators fear this will not be enough to swing the economics in favour of the offshore turbines, even if the costs ease as the recession bites and demand for turbines falls off, as there are some signs of happening.
Copyright The Financial Times Limited 2009