Centrica and Dong scrap 4.2 GW Celtic Array offshore wind project

• 9 years ago (2014-07-31)
• Junior Isles

Europe 1061 North America 998 Renewables 752

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Centrica and Dong Energy have announced they are abandoning plans to jointly develop up to 4.2 GW of offshore wind generation the Irish Sea, the Celtic Array, due to ‘challenging conditions’ which pushed up project costs.

The partners relinquished their right to develop a 2200 square kilometre (850 square mile) area of the Irish Sea in a statement posted on the project’s website.

“Our assessments have shown that ground conditions are such that it’s not viable for us to proceed with the technology that’s available at this stage,” the companies stated.

The Crown Estate, which manages the plot and all other UK seabed, has stated on its website that it has no current plans to offer the Celtic Array zone to other developers.

The sudden move highlights the cost issues being encountered by companies backing offshore wind, which face lifetime costs roughly twice that of onshore wind.

UK developers have cancelled more than 9.5 GW of planned offshore wind generation since November 2013, but despite the challenges it remains a core component of the UK’s renewable energy strategy and ministers maintain a target of 10 GW of wind offshore wind capacity by 2020 is viable. The UK had 3.7 GW of offshore wind generation capacity at the end of 2013, accounting for more than half of global installed capacity.

Reacting to the news, Nick Medic, director of offshore renewables at RenewableUK, the UK renewables trade association, stated: “Although it’s disappointing that this particular project isn’t going ahead, the reasons are understandable. Overall we still have over 37 GW of offshore wind capacity in the UK’s project pipeline, so we’re set to maintain our huge global lead in offshore wind, creating tens of thousands of jobs.”

Under its new contracts for difference scheme, the UK government is offering offshore wind £155 ($262) per MWh for projects added to the grid between now and April 2016. This frontloaded funding model, offering four times the current market price, is aimed at securing investment by helping to offset the substantial upfront cost of building new renewable power infrastructure.