WORLD’S BIGGEST OFFSHORE WIND TO UK

Rising steel and copper prices and wind turbine supply chain congestion are apparently not as much of a concern to Scottish & Southern Energy (SSE), the huge UK utility, as they are to Royal Dutch Shell.

Royal Dutch Shell last weeked backed out of its partnership with E.ON, the German utility, on the 1000-megawatt London Array offshore wind installation. Undaunted, SSE this week paid Texas engineering giant Flour 40 million pounds for half of the 504 megawatt Greater Gabbard offshore project. With the London Array put off, Greater Gabbard will be the biggest offshore wind installation in the world.

Why does an oil-money rich company back out of one project while a UK utility jumps into another so similar?

SSE isn't worried. Justyn Smith, spokesman, SSE: "[Great Gabbard will] meet our rigorous investment criteria".

NewEnergyNews asked Shell representatives about the London Array project in a May 15 press conference but was unable to get an answer.

The clue to the answer could be in the fact that German utility E.ON stayed in the London Array deal. A utility may see more longterm benefit from wind than an oil company in an emissions constrained economy. An oil company like Shell has the option of choosing from a variety of emissions-reducing investments to meet its EU ETS/Kyoto caps. A utility like SSE or E.ON must obtain a certain percent of its power from New Energy sources.

The oil company is guided by the EU’s cap-and-trade system. The utility is guided by the EU-wide Renewable Energy Standard (RES). It takes both for government policy to effectively incentivize the choices necessary in the fight against global climate change.

Both Greater Gabbard and The London Array are off the southeast coast, near the UK's biggest population center. (click to enlarge)

SSE to build world’s largest offshore wind farm
Tom Bergin (w/David Holmes), May 14, 2008 (Reuters)
and
Siemens to supply 140 wind turbines for the world’s largest offshore wind farm
14 May 2008 (prdomain)

WHO
Scottish & Southern Energy (SSE); Fluor; Siemens

click to enlarge

WHAT
The Greater Gabbard offshore wind installation.

WHEN
Greater Gabbard is expected to come online in 2011.

The UK is on track to be Europe's biggest wind producer. (click to enlarge)

WHERE
- Fluor is based in Texas.
- Siemens is German.

WHY
- Greater Gabbard will be 504 megawatts.
- On taking on the project, SSE awarded $3 billion in contracts to Fluor and Siemens. Fluor will build the project ($1.8 billion) and Siemens will make and service the 140 turbines ($1.2 billion).

Europe is at the beginning of a huge offshore wind expansion. (click to enlarge)

QUOTES
- John Hutton, Business Minister, UK: "The massive potential of the UK shoreline coupled with the right market conditions mean the UK is one of the most attractive places in the world to invest in offshore technology…"
- René Umlauft, CEO, Siemens/Renewable Energy: “Siemens is delighted to have signed this prestigious order with SSE as this marks a major milestone in the offshore business for Siemens as the clear market leader in the offshore wind energy business…”