Utilities

Danish utility DONG and German power giant E.On have bought Shell’s stake in the London Array wind farm, which is set to be one of the world’s biggest, for an undisclosed price.

The wind farm would be located more than 12 miles (20 km) from the Kent and Essex coasts in the outer Thames Estuary, one of the three strategic areas earmarked by the UK government for offshore wind farm development. Once up and running, it is hoped that the farm will make a telling contribution to the government’s renewable energy target of providing ten per cent of UK electricity from renewable sources by 2010.

Originally partners of Shell in the 341 turbine project, the utilities duo will now own half of it each – the planned 1,000 megawatt project could be able to power as many as a quarter of London’s homes.

Back in May, Shell said it would sell its stake in the farm in the Thames Estuary in order to focus on wind power in the US, where government incentives offered it ‘competitive returns’.

The costs of the London Array project have reportedly mushroomed, with turbine component prices rising especially quickly. And though the two remaining partners are yet to make a definite decision to proceed with the project, E.On hopes the decision will be made later this year. ‘We hope to be able to keep the project on track’, commented Paul Golby, chief executive of E.On UK, ‘and we should be able to complete the first phase by the end of 2012.’