19 Nov 2010
One of Scotland's leading wind energy developers has pulled out of the Crown Estate's Scottish offshore wind programme to concentrate its efforts on land, in a move that will raise questions about the industry's ability to meet its ambitious targets.
Fred Olsen Renewables (FOR) confirmed today that it has ceased working as the preferred developer for the 450MW Forth Array wind farm off the east coast of Scotland, following a strategic review of its wind farm portfolio.
Forth Array is part of the Crown Estate's Scottish Territorial Round, and would have included up to 90 turbines, as well as cabling and a new sub-station. Construction had been planned to start in 2013 and completed in 2018, with first energy being produced in 2016.
In a statement, FOR's UK managing director Nick Emery said the review had determined onshore wind development would provide a better outcome for its time and money.
"As an independent power producer we have concluded that the most efficient use of our development resource is in our onshore portfolios, where historically we have had considerable success," he said. "Crystal Rig Wind Farms I and II, for example, provide almost 10 per cent of Scotland's operational wind capacity."
However he added that the wider Fred Olsen Group will continue to support the offshore market through its supply chain companies, and FOR will continue to progress with the Codling offshore farm in Irish Waters.
A FOR spokesman additionally told BusinessGreen the company wanted to focus on viable medium term projects and the construction of Forth Array was considered too long term. FOR now wants to invest in new onshore projects and extend existing wind farms in Scotland.
He failed to disclose how much money FOR had invested in the project to date, but insisted it was not a significant sum because development was still in early stages. He added that there will be no redundancies, as employees who had been working on Forth Array would be redeployed elsewhere in the firm.
The fate of the Forth Array site now hangs in the balance. A Crown Estate spokeswoman said it was too early to determine if the site could be retendered, and the Crown Estate is now reviewing its position.
"One of the difficulties with the Scottish sites is that they are developer chosen sites, unlike Round 3, so there's less flexibility," she said.
The news is likely to reignite questions about the ability of renewable energy developers to meet ambitious targets to produce 15 per cent of energy from renewable sources by 2020 in the UK.
The Scottish Government has even more ambitious targets for 2020, for 80 per cent of its electricity demand to come from renewable sources.
The news could also spark fears that Fred Olsen's decision is the start of a trend of offshore wind developers abandoning their projects.
However, a spokesman for the Scottish government denied the decision would severely impact its goals.
His comments were echoed by trade association Scottish Renewables. Jenny Hogan, director of policy, said: "This is essentially a business decision, with Fred Olsen choosing to concentrate on installation and support services to other developers as well as its massive onshore wind portfolio across Scotland, rest of UK and Europe.
"Let's not forget that there are still over 10GW of offshore wind projects planned for Scottish waters."
FOR were one of nine successful developers within the Scottish Territorial tendering process, in which 10 Exclusivity Agreements were awarded in February 2009.
The Crown Estate hopes to award leases to the remaining developers, allowing commencement of formal consenting processes, when the Scottish Government completes its Strategic Environmental Assessment of offshore wind.
LATEST STORIES ABOUT WIND
YOU MAY ALSO LIKE
LATEST JOBS
TODAY'S TOP STORIES
HIGHLIGHT
Market has failed to provide sufficient new capacity to deal with increase in demand, energy minister warns
INSIGHT
INSIGHT
Service provider builds a compact, energy-efficient and scalable IT infrastructure
A look at alternative approaches to managing energy for cost and/or sustainability reasons in data centres
WHAT DO YOU THINK? Add your comment
Offshore costs
Hampy. Parsons Brinkerhof have been producing levelised costs for the UK market for years. See: ' Powering The Nation, 2010 update' - www.pbworld.co.uk/index.php?doc=528 PB estimate nuclear generation costs to be 6-8 pence per kilowatt hour (p/KWh), including decommissioning and waste disposal, compared to 15-21 p/KWh for offshore wind. They do not factor in transmission costs, this would add another 2-3pkWh. PB are also in the wind business, so can hardly be accused of bias! Using UKERC costings ( ‘Great Expectations: the cost of building offshore wind in UK waters – understanding the past and projecting the future', 27 September 2010) of 3 billion pounds/GW capacity, we could build 24-27 GW of effective EPR capacity for the same money. That is even at the inflated costs of Finland's over-budget EPR build. The UKERC figures actually seem optimistic going by what the industry is saying. RenewablesUK were quoting £3.25m/MW back in July and the market outlook and exchange rates have worsened since then.
Posted by Nick, 22 Nov 2010
Nuclear not renewable
The nuclear industry seems able to decieve even the UK government. First it is by no means GHG free. The mining and processing releases huge amoounts of GHG. Secondly Uranium ore is just as limited as coal. It will inevitably run out quite soon too at the present rate of use. Thorium has not yet been successfully used, and it may never be. Fusion is in my view never likely to succeed commercially, just think it means effectively synthesising solar conditions. Some hopes, but it does give scientists work to do. Meanwhile if the same money was invested in Wind, Wave, Hot Rock, even Osmosis, immediate results would accrue.
Posted by David King, 22 Nov 2010
puzzlement
Why do none of my comments appear??
Posted by Hampy, 21 Nov 2010
Reality
Hope this isn't a duplicate, I commented earlier but it didn't appear Secondly, the whole world can not live on nuclear energy alone and it is very risky to put all your energy in one basket (eg. nuclear). It's as simple as that. Thirdly, the idea of the traditional base load is going out of the window, we can't assume it will be the case in the future. Which is why the grid has to be adapted and become 'smarter'. The claims that EDMH make are extremely dubious. Costs of electricity are based on Kilowatthours or Megawatthours, not Kilowatts, Megawatts or Gigawatts. Calculating costs based on generating capacity is pretty dumb. A coal fired power station could have a 600MW generating capacity, but could be idle most of its life! Thus the costs per kwh for the idle power station would be focused on the capital costs of building it, rather than fuel, maintenance etc. The US Energy Information Administration published some outlook figures for 2010. Total system levelised costs $/megawatthour: Conventional Coal: 100.4 Advanced Nuclear: 119.0 Offshore Wind: 191.1 Gas Advanced Turbine: 123.5 Hydro: 119.9 Although offshore wind is known to be a higher cost than onshore wind, it is no where near the exaggerated levels that EDMH claims they are.
Posted by Hampy, 21 Nov 2010
Distorted figures and comments abuse
Firstly it seems the report abuse system doesn't work with the browser I am using so I can't report Mr Mackays triplicate posts. Secondly, the whole world can not live on nuclear energy alone and it is very risky to put all your energy in one basket (eg. nuclear). It's as simple as that. Thirdly, the idea of the traditional base load is going out of the window, we can't assume it will be the case in the future. Which is why the grid has to be adapted and become 'smarter'. The claims that EDMH make are extremely dubious. Costs of electricity are based on Kilowatthours or Megawatthours, not Kilowatts, Megawatts or Gigawatts. Calculating costs based on generating capacity is pretty dumb. A coal fired power station could have a 600MW generating capacity, but could be idle most of its life! Thus the costs per kwh for the idle power station would be focused on the capital costs of building it, rather than fuel, maintenance etc. The US Energy Information Administration published some outlook figures for 2010. Total system levelised costs $/megawatthour: Conventional Coal: 100.4 Advanced Nuclear: 119.0 Offshore Wind: 191.1 Gas Advanced Turbine: 123.5 Hydro: 119.9 Although offshore wind is known to be a higher cost than onshore wind, it is no where near the exagerated levels that EDMH claims they are.
Posted by Hampy, 21 Nov 2010
"Numbers not adjectives"
If the capital cost of Nuclear power is ~£1.4 billion / gigawatt (according to Prof David MacKay) and the newly commissioned array off Thanet cost £0.78 billion and is rated at 0.300 gigawatt but even using a generous load factor of 35% is only capable of producing on average 0.105 gigawatt , it appears that in capital cost terms alone offshore wind costs ~£7.5 billion / gigawatt or more than 5 times the cost of the equivalent nuclear production. These figures of course ignores the additional costs of the essential parallel backup generating capacity as well as the costs of continuing feed-in tariffs, estimated at about a further £1.2 billion over the 20 year life of the project. Supporting renewable energy, especially wind farms offshore or onshore, is something that this cash strapped government should re-examine very carefully. The French seem to manage it pretty well with 85% nuclear generating capacity, the lowest electricity cost in Europe and the lowest carbon footprint of the developed world. Paying, just for starters, more than 5 times in capital cost as much for an unreliable energy source must make economic nonsense.
Posted by EDMH, 21 Nov 2010
Road to nowhere
I think that renewables are not working and do very little to mitigate the effects of man made climate change. Until renewable start to deliver secure base load electricity and actually replace the burning of fossil fuels we will never see a significant reduction in CO2 emissions.
Posted by Andrew H Mackay, 20 Nov 2010
Very Wise
I think that renewables are not working and do very little to mitigate the effects of man made climate change. Until renewable start to deliver secure base load electricity and actually replace the burning of fossil fuels we will never see a significant reduction in CO2 emissions.
Posted by Andrew H Mackay, 20 Nov 2010