Statoil Advances on $2.6 Billion U.K. Offshore Wind Farm

Statoil ASA and Statkraft AS decided to proceed with a 1.5 billion-pound ($2.6 billion) wind farm off the U.K. coast, the Norwegian companies said, boosting an industry that’s had several projects scrapped in the past year.

The 402-megawatt Dudgeon project will have 67 wind turbines each with 6 megawatts of capacity, generating enough power for 410,000 U.K. homes, according to a statement today from Statoil, the project operator. The companies will first build an onshore substation and lay cables on land before beginning offshore construction in 2016.

The U.K. government touted the project decision as a vote of confidence in its effort to award contracts that guarantee the price renewable generators receive for the power they produce. Dudgeon was one of eight projects to win deals in April, a move questioned last week by the National Audit Office, which said the deals may be needlessly generous.

“Today’s decision underlines the success of our new contracts and will bring about a steady stream of investment in renewable electricity,” Energy Minister Michael Fallon said in an e-mailed statement. “The U.K. is attracting millions of pounds of investment, supporting hundreds of local green jobs and strengthening its energy supply with home-grown sources.”

Britain has more installed offshore wind power generation capacity than the rest of the world put together, with 3,689 megawatts out of 6,930 megawatts globally, according to Bloomberg New Energy Finance. Even so, developers since November have canceled more than 5,500 megawatts of planned capacity, citing costs, engineering difficulties and environmental concerns.

The Dudgeon project is about 20 miles (32 kilometers) off the coast of the seaside town of Cromer in north Norfolk, eastern England. Water depths in the area are 18 to 25 meters (59 to 82 feet), according to a statement from Statkraft. The companies intend to commission the farm by the end of 2017.

Statkraft said it will put in 30 percent of the investment, or about 450 million pounds. Statoil said it expects to invest 5.5 billion Norwegian kroner ($890 million). The companies didn’t say where the remainder of the investment will come from.

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