U.K. To Award £100 Billion in Offshore Wind Contracts

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--United Kingdom Prime Minister Gordon Brown will this week unveil offshore windfarm contracts worth more than £100 billion ($162 billion).

The announcement of the winners of the nation's next generation, or Round 3, of offshore windfarm development will take place in Exeter, and represents the largest offshore undertaking in the world. Round 3 installations will top 25 gigawatts (GW) across nine U.K. locations. All of the planned windfarms are considerably larger than any windfarms being built today and, according to the British Wind Energy Association (London), recently renamed RenewableUK, Round 3 contracts will result in up to 60,000 created jobs.

The announcement, made in conjunction with the Crown Estate (London), which controls most of the U.K. seabed, was expected in December but was delayed because of the the complexity of the contracts that were being finalised. Competitive tendering for the nine locations ended in March 2009, with more than 40 zone bids being submitted by 18 companies and consortia. For additional information, see March 23, 2009, article - U.K.'s Crown Estate Receives Bids for 25,000 Megawatts of Offshore Windfarms. The winning companies have been ordered not to reveal themselves until the official announcement later this week, but speculation about who has won is well under way.

The largest of the nine planned projects is Dogger Bank, which is located about 100 kilometres off the east coast of England and has a planned capacity of up to 10 GW. Potential construction costs of the project exceed £35 billion ($56.5 billion). It is believed that Forewind, a consortium consisting of Scottish and Southern Energy plc (OTC:SSEZY) (Perth, Scotland); RWE npower Renewables (Swindon, England), a subsidiary of RWE AG (OTC:RWEOY) (Essen, Germany); and Norwegian companies StatoilHydro ASA (NYSE:STO) (Stavanger) and state-owned Statkraft (Oslo) have secured the contract.

A 5,000-megawatt windfarm off the coast of Norfolk is also up for grabs, with the frontrunner being a consortium of Vattenfall AB (Stockholm, Sweden) and ScottishPower (Glasgow, Scotland), a subsidiary of Iberdrola SA (MCE:IBE) (Bilbao, Spain). The Norfolk windfarm will be three times larger than the London Array project currently being built in the Thames Estuary. With 341 turbines, London Array will be the largest offshore windfarm in Europe when it goes live in 2012.

In October, wind-generated power passed the 4-GW mark in the U.K. and is on track to overtake nuclear power by 2012 if the planning system is overhauled. Industry body RenewableUK estimates that another 2 GW of capacity will be added this year. At the moment, there are 12 GW of wind projects that are operational, are being built, or have obtained planning permission. The U.K. is aiming to obtain 30 GW of electricity from wind by 2020. For additional information, see October 27, 2009, article - U.K. Wind Power Breezes Past 4-Gigawatt Barrier.

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