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Scottish & Southern, Siemens to Develop U.K. Wind

Jan. 19 (Bloomberg) -- Scottish & Southern Energy Plc, the U.K.’s second-biggest power generator, and German wind turbine maker Siemens AG agreed to jointly develop offshore wind farms in the U.K.

The agreement includes three other marine engineering companies and will help reduce the cost of delivering power from wind turbines at sea, Perth, Scotland-based Scottish & Southern said today in a statement.

The utility’s SSE Renewables unit is also developing offshore installations with RWE AG and Dong Energy A/S as part of a U.K. drive to derive 15 percent of its energy from renewable sources in 2020. The U.K. last year reached 1 gigawatt of capacity from windmills at sea, the most in the world and enough to power more than 650,000 homes.

“The energy potential of offshore wind is vast, and in a resource- and carbon-constrained world it is a potential we need to fulfill,” Jim Smith, SSE’s director of offshore renewables, said in the statement. “In doing so, we need to make sure we maximize value and create a sustainable supply chain.”

A government report in June put the lifetime capital cost of the most expensive offshore wind developments at more than 140 pounds ($224) a megawatt-hour of generation, compared with about 80 pounds for onshore wind and less than 20 pounds for the cheapest gas-fueled generators.

“SSE’s strategy to secure a more coherent supply chain will help address the issues driving up these costs, such as substantial delays in construction and increasing capital costs,” Fraser Johnston, a wind industry analyst at Bloomberg New Energy Finance, said by e-mail.

The agreement also includes Subsea 7 Ltd., which provides vessels and construction for marine projects, Burntisland Fabrications Ltd. which builds foundations and supporting structures, and the engineering company WS Atkins Plc.

To contact the reporters on this story: Alex Morales in London at amorales2@bloomberg.net; Sally Bakewell in London at Sbakewell1@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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