Deal for World's Largest Offshore Wind Farm Finalized 20 comments
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A $3 billion deal has been finalized for the London Array wind farm to be built on a 90-square-mile area that will be 12 miles off the coasts of Kent and Essex. The world's largest offshore wind farm, the London Array will begin construction this summer after the British government doubled the incentives for offshore wind energy, says the project's main owner, Denmark's DONG Energy.
The 1,000-megawatt Thames Estuary behemoth had been in doubt after Royal Dutch Shell PLC (RDS.A) pulled out of the scheme last year because of rising costs, leaving DONG with a 50 percent stake, Germany's E.ON AG (EONGY.PK) with 30 percent and Abu Dhabi's renewable energy fund, Masdar, with 20 percent. Madar is just coming off a recent solar panel deal with China's Suntech Power Holdings (STP) and First Solar (FSLR).
The three wind energy partners have pledged to invest $3 billion for the 630-megawatt first phase of the project, which will be completed in time to deliver wind energy to the London Olympics in 2012. DONG Energy has built approximately half of all offshore wind farms in operation in the world today.
The British government provided £525 million in the 2009 budget for offshore wind subsidies between 2011 and 2014 by increasing the number of renewables obligation certificates, or ROCs, available for offshore wind generation.
The United Kingdom already has the most installed offshore wind power generation capacity in the world. ROCs are the main support scheme for renewable electricity projects in the United Kingdom. It places an obligation on U.K. suppliers of electricity to get an increasing proportion of their electricity from renewable sources -- from 9.7 percent this year to 15.4 percent by 2016. Suppliers meet their obligations by presenting ROCs or by paying into a buyout fund.
Under the new rules, the government will issue two ROCs for every megawatt-hour of offshore wind power produced, doubling the original incentive. A further £405 million in the budget were earmarked for "the development of a world leading low-carbon energy and green manufacturing sector in the U.K.," something that analysts expect will benefit mainly wind and tidal power and should kick-start the 8,000 megawatts of various U.K. wind power projects that have secured approval but have not started construction.
The London Array is a flagship project to cut carbon emissions by 80 percent by 2050 and meet future energy needs creating high wage jobs and prosperity for the economy.
The first phase will consist of 175 turbines built by Siemens AG (SI). The second phase will take the farm to 1,000 megawatts, or enough power for 750,000 homes -- a quarter of Greater London homes -- and displace the emission of 1.9 million tons of carbon dioxide emissions every year, according to project planners. But the investment decision to build the second phase will be taken separately and depends on phase one performance and additional environmental studies.
The wind turbine manufacturers supplying the U.S. market are, in order of units installed: GE Wind (GE), Vestas (VWDRY.PK), Siemens (SI), Gamesa (GCTAF.PK), Mitsubishi (MHVYF.PK), Clipper (CRPWF.PK), and Nordex (NRDXF.PK).
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This article has 20 comments:
That is embarrassing.
By Johnathan Vrozos JV
johnathanvrozos.com
Gee, is there a message here!!!!!
Every government will have to have more windpower because the voters want it, but the point is not to overdo it. Accordingly, on the plane of politics this UK project may be alright. But as for the comment in this article about cutting carbon and creating jobs....and so on by 2050, that doesn't make any economic sense at all.
Supply and demand. IF we use less oil and use alternative
energy. WHY does the U.S. NOT lead the way?
I think Freya answered your question about wind and oil.
buoy
I agree that smaller countries, that have more homogenous demographics and are generally not as complex as the U.S., have an easier time making decisions. However, we have far more potential for wind and solar energy than they do, because of our vast wide open spaces. And of course, we have more geothermal potential than most also.
The U.S. doesn't lead in installed wind or solar, but we increased our wind energy by 8.3 GW last year, the world's biggest increase, with China second at over 6 GW.
If we can improve on that rate of growth, we'll have a substantial amount of wind energy by 2020-2030.
8.3 x 11 years =91.3 GW by 2020.
8.3 GW x 30% capacity factor for wind = the equivalent of building 2.5 nuclear power plants of average size in one year. Try doing that with nuclear.
Ferdinand
I'm not sure what you are getting at. What doesn't make sense? Wind energy created lots of jobs in the U.S. last year, a 70% increase to 85,000, which is more people than employed mining coal and running coal plants.
Good comments. I especially think your point about added wind as a function of capacity needs to be expanded.
Here in Texas, we have seen both the benefit and risk of wind. In reality, the 2.4GW you reference is actually even a smaller part of effective load, with a greater rate of variability.
The variability is key; in early 2008, the wind in West Texas died unexpectedly. In order to keep the grid stable, generators had to buy electricity from Mexico.
So we still want our nuclear reactors to provide stable baseload!!
Sidenote: Within sight of my mother's cottage where the environmental police didn't let her patch her driveway for two years sits a huge new house in the dunes, seaside.
I guess concern for the environment is relative.
The US, on the other hand, has abundant coal stocks, and once the fearmongering over AGW subsides, there will be plenty of ability to ramp it up significantly (although energy consumption will slow due to economic reasons). Right now wind development is akin to ethanol- decentralized speculation only viable due to government subsidies. Utility-scale solar, however, will be much larger because it can reach grid parity on its own- but it may take 100 years.
> jack
Investment wise I believe that as a trader there is money to be made in wind and solar plays but as an investor I will continue to nibble away at uranium and nuclear energy related stocks.
On May 17 01:48 PM jouvet wrote:
> The brits don't really have solar as an alternative .... :-)
Hopefully twenty years from NOW, we'll be able to look back and realize how foolish it all was.
Good points.
I am not terribly pro wide deployment of utility scale solar until the storage problem is worked out. It is a significant amount of land use, has environmental implications, and for a part time source, that is currently expensive.
Kevin,
Great note on nuclear power. Here in Texas we have several plants cued up, but the current administration is balking at providing the necessary financial guarantees for all the projects.
If Egypt had built the pyramids with nuclear energy, their waste products would now be only half as poisonous as they were 5,000 years ago. Have you gung-ho advocates of nuclear power forgotten that we have not figured out what to do with the waste products from our current plants. They are still being "stored" on site. Our "Carbon Footprint" is minuscule compared to what our Gamma Ray Footprint could do to the environment.
Here is a link to some news about the French nuclear system and how it coped with the killer heat wave of 2003. environmental.freewebs...
Nuclear power is a very fragile system.