Energy firms get go-ahead for UK wind farms

LONDON Mon Feb 16, 2009 3:50pm GMT

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LONDON (Reuters) - Britain on Monday approved bids by energy firms to boost the number of offshore wind farms, potentially helping the UK to move closer to hitting tough renewable energy targets.

The Crown Estate, an independent body which owns all the seabed within 12 nautical miles of the UK coast, said it was awarding exclusivity agreements to companies and consortia to develop wind farms on 10 sites in the sea around Scotland.

The sites could generate a total of more than six gigawatts of offshore wind power, it said, contributing to the UK's bid to generate 15 percent of its energy from renewable sources by 2020.

Britain generates about three gigawatts of energy from wind farms, enough to power more than 1.5 million homes. The government estimates the UK will need to generate about 28 gigawatts in this way to hit the 2020 target.

Ministers have insisted they are on track to achieve their goal, but experts have voiced doubts due to funding, planning and technical issues.

Companies which won approval to develop farms individually included E.ON Climate & Renewables UK Developments, Dong Wind UK, Scottish & Southern Energy's (SSE) Airtricity Holdings, Scottish Power Renewables, Mainstream Renewable Power and Fred Olsen Renewables.

There were also successful joint applications involving Airtricity and Aberdeen-based energy investment company Ramco Energy Plc's SeaEnergy Renewables unit, RWE's Npower Renewables and SeaEnergy, and Airtricity and U.S. civil engineering group Fluor.

The exclusivity agreements are designed to allow developers to begin initial survey and consultation processes for their sites. The Crown Estate will award lease agreements for the sites in 2010, subject to completion of an offshore wind environmental study by the Scottish government.

The Crown Estate's marine estate director Rob Hastings said: "The award of 10 exclusivity agreements is excellent news for the companies involved, the Crown Estate and for Scotland."

SSE said its Airtricity renewable energy unit would develop offshore wind farms at four locations in Scottish territorial waters.

The proposed wind farms at Beatrice, Bell Rock, Islay and Kintyre could have a combined capacity of up to 2,700 megawatts, the company said in a statement.

Airtricity linked up with SeaEnergy Renewables to win the Beatrice agreement and with Fluor for the Bell Rock deal.

Airtricity holds a 75 percent stake in the Beatrice Offshore application, while SeaEnergy holds the rest.

"SSE is also seeking to play a significant role in The Crown Estate's plans for a third round of offshore wind farm developments in zones off the coast of the UK," SSE said.

SeaEnergy and partner RWE Npower Renewables won preferred bidder status for Inch Cape Offshore wind farm, with SeaEnergy owning a 25 percent stake and Npower Renewables holding the rest.

The combined SeaEnergy interest in both of its projects was about 456.25 megawatts.

Shares of Scottish & Southern were down 0.75 percent at 1193 pence at 1258 GMT, while Ramco shares were up nearly 4 percent at 53 pence on the London Stock Exchange.

(Reporting by Tresa Sherin Morera and Philip Waller; Editing by Gopakumar Warrier, Rupert Winchester and Guy Dresser)

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