Fresh doubts have emerged over Britain’s plans for a huge expansion of offshore wind power after Abu Dhabi said yesterday that it was reconsidering the viability of a £3 billion scheme to build the world’s largest offshore wind park in the Thames Estuary

The London Array project, a plan to build 341 turbines with the capacity to generate 1,000 megawatts of electricity – more than that produced by most of the nuclear reactors in Britain – has been in trouble since last May, when Shell pulled out of the project, citing spiralling costs.

Masdar, a $15 billion (£10.3 billion) renewable energy fund controlled by the oil-rich city-state, subsequently acquired Shell’s 20 per cent stake, a move that drew strong support from Gordon Brown and his Government.

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Yesterday, however, Masdar raised questions about its commitment. “The economics of this project should be revisited,” Ziad Tassabehji, the director of innovation and investments for Masdar, said at a renewable energy conference in Abu Dhabi. “We are working with our partners to study the feasibility of the project.”

Masdar’s other partners in London Array include E.ON, the German power group, which holds a 30 per cent share, and DONG Energy, of Denmark, which owns the other half. A spokesman for E.ON said yesterday that no final decisions had been taken. “We’re going through the tendering process for London Array and, until we ensure that the project is economic, we’re unable to give it the green light,” he said.

“However, while the economics are certainly difficult, we’re hopeful that the sums will add up and that the project will get built on time.”

He said that a key consideration was the price of steel, which has collapsed in recent months, a factor that could help to bolster the economic case for the project. He said: “We’re waiting to see if current economic difficulties mean that reducing steel prices will see falling turbine prices.”

A DONG spokesman said that no final investment decision had been taken, but declined further comment.

London Array is the latest in a string of renewable energy schemes to hit trouble in recent month. The credit crunch and the collapsing oil price has undermined the economic case for many of them.

Industry experts say that the cost of building offshore wind developments in Britain is about £3 million per mega-watt of electrical generating capacity. That is more than three times the cost of building a conventional gas-fired power station.

If built, the London Array scheme would be spread across a 90-square-mile site more than 12 miles off the Kent and Essex coasts. The first stage, comprising 175 turbines, is scheduled to be working by 2012. The second stage is to increase capacity to 1,000MW of electricity production, enough to power 750,000 homes. equivalent to a quarter of all domestic housing in the capital.

The development would contribute a significant part of the Government’s aim of generating 20 per cent of the UK’s energy from renewable sources by 2020.

Separately, Abu Dhabi said yesterday that it planned to generate 7 per cent of its electricity from renewable sources by 2020.

Source: Times Online

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