British consents for four in North Sea

Four more offshore wind projects are now cleared for construction in British waters. Energy minister Stephen Timms gave his consent for them late last month. All are located in the North Sea off the east coast of England. They are located off Skegness in Lincolnshire, off the Norfolk coast and off Clacton-on-Sea in Essex.

1 November 2003

Two-thirds of the first round of offshore projects granted site leases in the UK are now cleared for construction, with Europe's energy heavyweights showing themselves ready and willing to lift them off the sea bed

BRITISH CONSENTS FOR FOUR IN NORTH SEA

Four more offshore wind projects are now cleared for construction in British waters. Energy minister Stephen Timms gave his consent for them late last month. All are located in the North Sea off the east coast of England. They are Amec Wind Energy's project at Lynn and Offshore Wind Power's project at Inner Dowsing -- both off Skegness in Lincolnshire -- and EDF Energy's Cromer project off the Norfolk coast and GE Wind's Gunfleet Sands project off Clacton-on-Sea in Essex.

The sites are located at least three miles out to sea. Each will comprise 30 turbines giving a total capacity of some 450 MW. They bring the number of consented offshore projects in British waters to 12 out of the original 18 that were granted development leases in the UK's initial round of offshore wind licensing. Of these, National Wind Power's 60 MW offshore wind station at North Hoyle off the north Wales coast will be completed this month.

Offshore wind is expected to make a large contribution to the British government's target of 10% of electricity from renewables by 2010. Timms says: "Up to three quarters of all renewable energy is likely to be produced by wind power by 2010, which means around 8 GW of clean green electricity." The industry estimates that around 50% of the new wind capacity over the next six years will come from offshore. The 12 consented sites could result in a combined generating capacity of 1073 MW from 360 turbines -- just under 1% of UK electricity supply.

The major hurdle facing several of the projects now is obtaining financing. Marcus Rand of the British Wind Energy Association calls for action from government to enable the financing of the projects to turn consent into reality. A renewables conference in London in October heard that only large multinational companies with financial muscle will be able to complete the offshore projects by financing on balance sheet.

Douglas Coleman from United Utilities pointed out that the two projects under construction are both being financed on balance sheet -- by RWE Innogy, owner of National Wind Power, and by Powergen. "It's unlikely that anybody will be seriously considering off balance sheet financing of offshore renewables in the next five to six years. If you speak to the banking community, they'll say never in their lifetimes," he said. Only large players can cope with large offshore projects, he added. "The other consented sites have all been for sale. The reason is that smaller players can't get the projects away." Recent acquisitions support his argument. In September, energy and services giant Centrica bought the Barrow offshore wind project and Powergen, owned by E.ON of Germany, bought the 60 turbine Robin Rigg project. Earlier, Enxco -- a subsidiary of French energy company EdF, bought out the interests of small developer Wind Prospect in their joint development at Burbo Bank.

In July the government launched the second round of offshore development licences for larger projects sited further out to sea. Applications for site licences were to be submitted to the Crown Estate, the seabed owner, by October (�u�X��ʘ��, September 2003). A further announcement is expected this month.