Royal Dutch Shell PLC said it will sell its stake in the world’s largest planned offshore wind-power station by generating capacity, illustrating the shaky economics of wind power.
The project, known as the London Array, involves Shell, E.On U.K. and Denmark’s Dong Energy A/S, with each holding a one-third stake. It plans to put 341 large wind turbines in the River Thames Estuary to generate 1,000 megawatts, or enough electricity to power as many as a quarter of the homes in the greater London area.
Commenting on the decision, Paul Colby, chief executive of E.On U.K. said: “The current economics of the project are marginal at best, with rising steel prices, bottlenecks in turbine supply…”.
The cost of the project is estimated at between £2 billion and £3 billion. The current cost of an offshore wind project is three to four times as much as building a gas-fired power plant, according to Centrica PLC.
Source: WSJ, 02-04/05/08
