UAE-based renewable energy firm Masdar has extended its international portfolio through an agreement with E.On to purchase a stake in the world’s largest offshore wind project.
Masdar has agreed to buy 40 per cent of E.On’s half-share in London Array, a 1000 MW scheme in the Outer Thames Estuary in the southeast of England. Dong Energy retains its 50 per cent share in the project.
The announcement comes just a few months after Shell decided to pull out of the project, the first stage of which is expected to be complete by the end of 2012 and which will make a major contribution to the UK’s renewable energy goals. Masdar and E.On are also intending to work together on a range of other renewable energy projects.
“London Array is an important investment for Masdar into the wind sector. We believe that the offshore wind market will be a major force in the future and this is a very opportune time for us to enter this developing segment of the renewable energy market,” said Dr Sultan Al Jaber, CEO of Masdar.
London Array will consist of up to 271 wind turbines located more than 20 km off the Kent and Essex coasts. It will be built in two stages, with the first stage consisting of 175 turbines and the second stage bringing the total installed capacity to 1000 MW.
E.On and Masdar’s initial focus will be on the London Array project, but they say that they expect to announce a series of other projects across a broad spectrum of renewable energy. E.On says it is planning to invest EUR6 billion by 2010 to help move renewable energy projects from “boutique to an industrial scale”.
E.ON CEO Dr. Wulf Bernotat said: “The London Array offshore wind farm scheme is a pioneering project and marks a significant increase in scale for offshore wind farms in the UK, and also for E.ON.
“As with all major steps forward in our industry, the project will raise important challenges and the lessons we learn will be vital for the development of the next generation of offshore projects. We have secured in Masdar a strong partner to work with us on the London Array scheme and on future renewable energy projects which will help push the industry to its next stage.”
E.On and Danish utility Dong Energy joined forces in July to buy Shell’s stake in the project after the oil firm pulled out in May. Analysts attributed Shell’s decision to soaring costs, which rose from initial estimates of £1.5 billion to £2.5 billion.
The UK government hopes that London Array – and other major offshore wind projects – will make the country a world leader in the technology.
British Prime Minister Gordon Brown said: “I very much welcome Masdar’s decision to invest in renewable energy in the UK. This is an excellent example of the partnership we need between oil producing and oil consuming countries to develop new energy sources and technologies, diversifying their economies and reducing our dependence on carbon.
“The scale and vision of the London Array is groundbreaking, and places the UK at the forefront of offshore wind development”.
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