U.K. Crown Estate Plans More Than 20,000 Megawatts of Windfarms Under Round 3 Licenses

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Crown Estate (London, England), an independent body that owns the seabed within 12 nautical miles of the United Kingdom's coastline, is expected to announce the award of contracts under Round 3 of the Offshore Wind Development Program at the end of December. The projects under Round 3 include a 5,000-megawatt (MW) windfarm off the coast of Norfolk and an even larger 10,000-MW project in the North Sea.

The size of the projects to be developed makes the prospect of a single firm receiving contracts for the proposed windfarms highly unlikely. Instead, the licenses are expected to be awarded to consortiums of leading energy companies, which will then aim to place the first turbines by the beginning of 2014.

The 5,000-MW Norfolk windfarm will be three times larger than the London Array windfarm project, currently under construction in the Thames Estuary and expected to go online in 2012. After completion, the London Array, with 341 turbines, will be the largest offshore windfarm in Europe, but will eventually be overshadowed by the Norfolk windfarm.

A consortium of Iberdrola SA (MCE:IBE) (Bilbao, Spain) subsidiary ScottishPower (Glasgow, Scotland) and the Vattenfall AB (Stockholm, Sweden) is expected to be awarded the contract to build and operate the Norfolk windfarm.

Even larger than the Norfolk windfarm is the proposed windfarm to be located at the Dogger Bank in the North Sea. This windfarm will produce 10,000 MW. The contract to build and operate this windfarm is expected to go to a consortium known as Forewind, 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).

Other offshore windfarm projects due to be developed in the U.K. as part of Round 3 include a 5,000-MW project in the Irish Sea, a 2,500-MW windfarm in the Humber Estuary, and a 1,000-MW windfarm off the southern coast near Hastings. A number of smaller projects are also included in Round 3.

To date, only a small number of windfarms operate offshore in the U.K. These produce between 60 MW and 200 MW each. With a target of generating about one-third of all electricity produced in the U.K. from renewable resources by 2020, government officials estimate that up to £100 billion ($167 billion) will need to be invested in windfarms to attain the target. Experts estimate that electricity production from windfarms will need to reach a minimum of 33,000 MW, and may need to be as high as 40,000 MW.

Although the U.K. is the windiest country in Europe, it currently produces only 4,000 MW of wind power, placing it behind Germany, which generates 25,000 MW of wind power, and Spain, which has a wind power generating capacity of 17,000 MW.

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