Offshore wind farms seeming uneconomic

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The recently announced strike price increase of £5/MWh for offshore wind in 2018/19 did not generate a reaction from RWE Innogy following their announcement to shelve plans for a huge wind farm off the north Devon coast.

Technical challenges prohibit development

Developer, RWE, has pulled the plug on the 240-turbine Atlantic Array project, stating it was “not the right time.” RWE’s director of offshore wind, Paul Cowling, sited “technological challenges of deeper waters and adverse seabed conditions” as the reasons behind the decision. RWE said that “costs to overcome such technical challenges are prohibitive in current market conditions.”

Interestingly, Paul Cowling didn’t mention Dogger Bank, where RWE is one of four partners (with SSE, Statkraft and Statoil). We can assume that offshore projects off the east coast are currently continuing as planned.

The Atlantic Array was planned in an area of 200 sq km (77 sq miles) about 16.5km (10 miles) from the north Devon coast. The turbines would have been 220m (720ft) tall and capable of producing 1,200 megawatts of electricity – enough for up to 900,000 homes.

What makes a successful project?

Speaking on behalf of The Crown Estate, Huub den Rooijen, Head of Offshore Wind said: “Now that the industry has been developing projects for a number of years, there is a much deeper understanding of the characteristics of successful projects and we will see further attrition in the time to come. Paradoxically, this is a positive development because it provides greater clarity to key stakeholders such as supply chain and consenting bodies, and brings greater focus to the investment opportunities.”

Plans for the £5.4 billion Argyll Array offshore wind farm near Tiree in the Inner Hebrides have also been dropped. Up to 300 wind turbines were planned for the Argyll Array with a capacity of up to 1800MW – enough to power up to a million homes.

ScottishPower Renewables (SPR) announced it would not proceed with the Argyll Array scheme following technical and environmental site studies. It cited construction issues and “a significant presence” of basking sharks in the area for its decision. SPR said it could be 10 to 15 years before for technology improved enough to make the project viable.

For more information, help or advice please contact Andrew Davison on 0191 211 7950.