Newspaper article The Evening Standard (London, England)

Soaring Costs Threat to London Wind Power Plan; CITY BRIEFING

Newspaper article The Evening Standard (London, England)

Soaring Costs Threat to London Wind Power Plan; CITY BRIEFING

Article excerpt


A MASSIVE, [pounds sterling]1.5 billion wind farm planned for the Thames estuary to supply electricity for a quarter of London could be scrapped because it is too expensive, the Evening Standard can reveal.

In what would be a huge blow to the Government's drive to get Britain switched onto wind energy, the flagship London Array project to erect 270 turbines off the Kent and Essex coasts is in serious doubt, according to its developers.

A year ago, the Powergen electricity group E.On, in league with oil giant Shell and Danish group Energi2, unveiled plans for the landmark scheme capable of producing more than 1000 megawatts of power to help bridge the expected shortages in power generation in the next decade.

However, amid rising metal prices and construction costs, the developers admit there are no guarantees they will go ahead with the scheme, even if they do win complicated planning consents.

"We have to get through the planning applications first and then we have to make sure the sums add up. If the scheme is not economic then you've got a problem," a spokesman for E.On said.

Asked if the scheme is likely to hit deadlines to begin construction next year with first power generated in 2008, the spokesman admitted: "It is impossible to say."

The acknowledgement comes after Energi2 said the amount of money the consortium would have to put up to guarantee the scheme could be too big a hurdle.

Guarantees for the scheme to get National Grid to plug the wind farm into the UK's electricity transmission network are likely to stand at 10% of the project, meaning E.On, Shell and Energi2 would have to put down as much as [pounds sterling]150 million upfront.

E.On, headed in the UK by chief executive Paul Golby, has already signalled it is getting cold feet over its push into renewables.

Last winter it pulled what would have been Britain's largest offshore wind farm to date, the Scarweather project in Swansea Bay. …

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