Second huge offshore wind farm axed in space of two weeks

by Search Gate staff. Published Fri 13 Dec 2013 12:57
Another blow to UK's renewable energy targets
Another blow to UK's renewable energy targets

Plans for the £5.4bn Argyll Array offshore wind farm have been axed after energy firm ScottishPower Renewables admitted the scheme was no longer financially viable.

The company said plans to install 300 turbines with a capacity of up to 1800MW - enough to power up to a million homes – would not provide a return on investment for at least another decade.

The news comes two weeks after renewable energy giant RWE Innogy pulled the plug on its massive £4bn Atlantic Array project planned for the Bristol Channel, blaming “technological challenges and market conditions”.

Last month European industry chiefs warned shifting Government support was threatening £100bn of investment in the wind energy sector.

In a statement, ScottishPower Renewables (SPR) today said it would not be taking forward the lease option to develop the Argyll Array following detailed technical and environmental site studies.

The company stated that the project may be viable to reconsider as offshore wind technology develops in the longer term, but estimates that will not be within the next decade.

ScottishPower Renewables said a 12-month review of project studies completed as part of initial development work had found the scheme was no longer viable. A decision not to progress the project, was taken by both SPR and The Crown Estate.

According to today's statement, the main issues preventing the project from proceeding are the ground conditions in the site, particularly the presence of hard rock, coupled with challenging wave conditions which could impact construction.

In addition, there is a significant presence of basking sharks, which environmental groups continue to study to get a greater understanding of their movements in the area.

Jonathan Cole, Head of Offshore Wind at ScottishPower Renewables, said: “We believe it is possible to develop the Argyll Array site, it has the some of the best wind conditions of any offshore zone in the UK.

“However, it is our view that the Argyll Array project is not financially viable in the short term. As cost reductions continue to filter through the offshore wind industry, and as construction techniques and turbine technology continues to improve, we believe that the Argyll Array could become a viable project in the long term.

“The rate of progress in development of foundation and installation technology has been slower than anticipated. The current outlook for offshore wind deployment in the UK suggests this will not significantly improve in the short term. This supports the view that it could take 10-15 years for the required technology improvements to be available for this project.

“The Crown Estate agrees with our findings and development work will cease on the project with immediate effect. This will give ScottishPower Renewables the opportunity to fully construct the West of Duddon Sands project with DONG Energy, and continue development work on the East Anglia Zone with Vattenfall.”

The Crown Estate manages the seabed around the UK, including leasing for offshore renewable energy projects. The organisation, which works on a commercial basis with profits paid to the UK Government, does not regulate or give planning consent for projects.

Ronnie Quinn who leads The Crown Estate’s Scottish Energy & Infrastructure team said: “While there is an excellent wind resource at the Argyll Array site, both organisations agree that the project should not proceed at this point in time.

“Developers have to take a wide range of factors into account when preparing to apply for planning consent - this decision by The Crown Estate and SPR follows a very thorough assessment of all those factors. We look forward to continuing to work with ScottishPower Renewables on other sites and programmes.”

ScottishPower Renewables says it continues to demonstrate commitment to offshore wind in the UK, with the 389MW West of Duddon Sands project currently under construction in the Irish Sea with DONG Energy. An application for consent was also submitted in 2017 with Vattenfall for the East Anglia ONE offshore windfarm, which could have a capacity of up to 1200MW.

Commenting on today's announcement, RenewableUK’s Deputy Chief Executive, Maf Smith said: “The fact that not all wind farm projects go ahead is a natural part of the development process. Some encounter physical obstacles or financial challenges which mean that they aren’t viable for the time being – although they will be in the future, as cutting-edge wind turbine technology is developing at an astonishing rate.

“Other projects of course go ahead – only yesterday DONG Energy announced it had bought Centrica’s stake in Race Bank offshore wind farm, demonstrating that there’s a vibrant market for such projects.

“When you take a broad overview, the pipeline of projects is still a healthy one. We already have 22 offshore wind farms operating successfully, providing clean electricity for 2.5 million households. 5 more are under construction, a further 8 have been approved and another 12 are awaiting consent.

“The current pipeline of projects gives us the potential to have 20 gigawatts of wind energy installed in UK waters – more than five times as much as we have now. The Department of Energy and Climate Change says up to 39GW is possible by 2030.

“Installing this great capacity will maintain Britain’s global lead in this dynamic field and secure even more economic benefit for UK plc. We’re continually learning how best to harness some of the most powerful forces in nature, so that we can make a successful transition from fossil fuels to cost-effective low-carbon renewables.”

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