Renewables projects hit choppy waters

May 13 2008 by Sue Scott, Evening Gazette

A NORTH East company has been left high and dry as the world’s largest offshore wind farm project ground to a halt.

Shell, which left its energy partners Eon and Danish owned Dong Energy high and dry when it pulled out of the 341 turbine development in the Thames estuary, declined to give detailed reasons for its decision. But observers pointed out that costs had escalated by around 250% to £2.5bn since the development was first mooted in 2003. Despite a sweetener from the Government, which recently doubled the value of Renewables Obligation Certificates (ROCs) - which are used as a way of offsetting the cost of installing and running large scale green energy projects - it had probably proved too much for the oil giant, which is involved in similar schemes elsewhere. One of the casualties of its decision to pull out was Hexham-based Econnect, which is preparing the Tees Valley to be among the first “renewables-ready regions” in the UK. It was set to provide the London Array, which was due to produce enough power for a quarter of London’s homes - with connectivity to the national grid. The company said this week it was inappropriate to comment on Shell’s withdrawal, but Dr Matt Hogan of Newton Aycliffe-based Revolution Power, was more outspoken.

“It’s easy to blame Shell, but if the right incentives were in the UK they wouldn’t be going anywhere else,” he said. “The Government needs to get its finger out. It’s really quite shocking - even China is doing more than us.”

Dr Richard Court of the R&D group NaRec, which works with TWI at Wilton among others on developing technology for the renewables industry, said: “Cost of offshore wind is always going to be a big issue - that doesn’t mean that by trying harder we can’t bring the costs down.” He revealed that a consortia of companies was already looking to work together to form a supply chain partnership.

Worldwide there is a critical shortage of components for wind energy projects, which is threatening the UK Government’s ambitious plans to build the equivalent of 33 London Arrays around the shores of Britain by 2020. A development one tenth the size of London is already earmarked for the seas off Redcar, but awaiting a high court hearing in July following local objections.

Foreign firms are eyeing Britain as a potential honey pot if they can ramp up production. US-based renewables company Clipper has already announced plans to set up a plant here.

“2020 is an ambitious target - I don’t quite see how it’s going to happen,” admitted Dr Court.

But he said firms on Teesside and in the wider region were taking a long-term view and Shell’s decision, while “depressing”, would not blow the industry off course.

While the land-based wind energy business was dominated by mainland Europe, Teesside’s “interesting blend” of skills in marine engineering and off shore oil and gas exploration meant it was well-placed to pitch for future projects both here and abroad.

The Resolution, moored at Teesport, was the only UK ship capable of carrying out offshore wind farm installations in the North Sea, although European suppliers are now building their own facilities.