Shell to exit wind project

By Tom Bergin

LONDON (Reuters) - Royal Dutch Shell aims to sell its stake in one of the world's largest planned wind farms, drawing criticism from the government, its partners and environmentalists for jeopardising the project.

The Anglo-Dutch oil major, whose corporate advertising focuses on its green energy initiatives despite these being only around 1 percent of its investments, said it was shifting its wind power focus to the United States, where it said government incentives offered competitive returns.

"As part of an ongoing review of projects and investment choices, Shell has taken the strategic decision to look at disposing of its shareholding in London Array," Shell said in a statement on Thursday.

Shell is one of three shareholders -- along with German utility E.ON AG and Denmark's state-controlled DONG Energy -- in London Array, which aims to have up to 341 turbines some 20km (12 miles) generating 1,000 MW in the Thames Estuary, east of London.

Paul Golby, Chief Executive of E.ON's UK unit said the decision put pressure on the 1.5 billion pound project.

"At the very least, some delay to the project is now inevitable," he said.

Golby said rising steel prices and a tight market for turbines meant "the current economics of the project are marginal at best" and that Shell's exit is "a new element of risk into the project".

Shell's decision follows plans by rival oil major BP to review its renewable energy portfolio for possible part sale or flotation, after Chief Executive Tony Hayward decided his investors put little value on the assets.