Scottish Power Commits $3.5 Billion for U.K. Offshore Wind Farmby
East Anglia One will be in North Sea 45 kilometers from coast
Deadline for final investment decision is the end of March
Scottish Power Ltd. decided to move forward with a 2.5 billion-pound ($3.5 billion) investment to build one of the U.K.’s biggest offshore wind farms in the North Sea.
Construction of the East Anglia One offshore field will begin next year, the Glasgow-based subsidiary of Iberdrola SA said in an e-mail. The wind farm, located about 45 kilometers (28 miles) off the U.K.’s east coast, will have 102 turbines with capacity of 714 megawatts -- more than any other currently operating offshore wind farm.
It’s the second major offshore wind project to get the green light for development this month. Dong Energy announced Feb. 3 that it too would move ahead with its 1.2-gigawatt Hornsea Project One, which is slated to become the world’s biggest offshore wind farm when it’s completed in 2020 and could cost as much as $5.7 billion to build, according to Bloomberg New Energy Finance.
“ScottishPower won a contract for difference for this project in March last year and has a year to show that it can close a certain percentage of financing to be able to move forward,” said Keegan Kruger, wind analyst at Bloomberg New Energy Finance. “This milestone is coming up next month, reaching it will enable the developer to achieve the date of commercial operations they agreed in the contract and make use of the subsidy.”
Scottish Power, which secured a 119 pounds-per-megawatt-hour price through auction, should have its Siemens AG-built turbines installed by 2019. Construction work will create 3,000 jobs and the completed farm will provide enough power for 500,000 homes when it’s connected to the grid in 2020, according to company estimates.
Mainstream Renewable Power Ltd. and a consortium led by SSE Plc also have until the end of March to reach final investment decisions on offshore wind projects they are developing in order to be eligible for U.K. government subsidies.