UK to award £100 billion in offshore wind contracts

LONDON, ENGLAND - United Kingdom Prime Minister Gordon Brown will unveil offshore wind farm contracts worth more than £100 billion (US $162 billion).

The announcement of the winners of the nation's next generation, or Round 3, of offshore wind farm development will take place in Exeter, and represents the largest offshore undertaking in the world. Round 3 installations will top 25 gigawatts (GW) across nine UK locations.

All of the planned wind farms are considerably larger than any wind farms being built today and, according to the British Wind Energy Association, recently renamed RenewableUK, Round 3 contracts will result in up to 60,000 created jobs.

The announcement, made in conjunction with the Crown Estate, which controls most of the UK seabed, was expected in December but was delayed because of the complexity of the contracts that were being finalized. Competitive tendering for the nine locations ended in March 2009, with more than 40 zone bids being submitted by 18 companies and consortia.

The winning companies have been ordered not to reveal themselves until the official announcement, but speculation about who has won is well under way.

The largest of the nine planned projects is Dogger Bank, which is located about 100 kilometres off the east coast of England and has a planned capacity of up to 10 GW. Potential construction costs of the project exceed £35 billion ($56.5 billion). It is believed that Forewind, a consortium consisting of Scottish and Southern Energy plc; RWE npower Renewables, a subsidiary of RWE AG; and Norwegian companies StatoilHydro ASA and state-owned Statkraft have secured the contract.

A 5,000-megawatt wind farm off the coast of Norfolk is also up for grabs, with the frontrunner being a consortium of Vattenfall AB and ScottishPower, a subsidiary of Iberdrola SA. The Norfolk wind farm will be three times larger than the London Array project currently being built in the Thames Estuary. With 341 turbines, London Array will be the largest offshore wind farm in Europe when it goes live in 2012.

In October, wind-generated power passed the 4-GW mark in the UK and is on track to overtake nuclear power by 2012 if the planning system is overhauled. Industry body RenewableUK estimates that another 2 GW of capacity will be added this year. At the moment, there are 12 GW of wind projects that are operational, are being built, or have obtained planning permission.

The UK is aiming to obtain 30 GW of electricity from wind by 2020.