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Shell Pulls Out of London Array Wind Farm

May 2, 2008   |   8 Comments

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"Consortia come together to deliver large scale wind farms and then often re-group at various stages of project development, for instance at the planning stage, or once the bids from subcontractors come in. This is common practice in the wind industry and has happened many times already both offshore and onshore."

-- Maria McCaffery, Chief Executive, BWEA
8 Reader Comments
Comment
1 of 8
May 2, 2008
I'm guessing that Shell is following BP's lead in junking its green-energy path to pursue more short-term profits out of the oil price spike. Just gotta keep pumping those carbon emissions into the atmosphere!
Comment
2 of 8
May 3, 2008
This doesn't mean that Shell is "junking" its renewable investments. On the contrary, given the much lower development cost of onshore wind in the U.S. as compared to offshore wind, Shell may be capable of making a bigger impact overall to the growth of renewable energy by shifting its investments in that direction.
Comment
3 of 8
May 5, 2008
I think that we have to see which on shore US wind sites are being selected by Shell. Normally, off shore sites cost more to set up but the pay off may be greater in the long run due to higher average wind velocities at sea.

My guess is that with the increase in Global Warming and greater storm intensities, Shell may believe that on shore wind facilities are a safer investment.

I believe that Shell is carfully weighing risk factors.

adrianakau2aol.com
Comment
4 of 8
May 7, 2008
With an installed capacity of 1GW and a load factor of ~30%, what proportion of London's homes would the London Array really supply? The UK has placed nearly all its bets on wind and is now reaping the whirlwind.
Comment
5 of 8
May 7, 2008
Spending $5 billion for a 1000MW nameplate capacity wind farm with a likely effictive capacity of around 250-300MW makes no economic sense. And that wind farm will have to be backed up by new natural gas plants at additional expense.
Comment
6 of 8
May 8, 2008
I suspect that the UK planning laws are a major factor. For a long time Kent were refusing planning permission for the electricity shore station and Uk law allowed them to hold up the entire project. Also doing any business with the current labour government is fraught with trouble as they just are not business oriented and don't understand how to make complex projects work. I think the previous correspondents have been too cynical. The oil companies are all keen to get into green energy and especially windpower because even they can sense the public hostility to the oil industry.
Comment
7 of 8
May 8, 2008
Looking at Shell wind investments , they appear to be serious scale exploration of technology and sites. My guess is that they have discovered from this exploration that you can get more ergs for the buck quicker somewhere else.

What matters is that they displace as much carbon as possible as fast as possible. If that turns out to be in US on shore that doesn't matter.

It will be important to note in their accounts whether they have reduced their investment in renewables or just reallocated it.
Comment
8 of 8
May 11, 2008
The cost of Ocean based windmill parks is high. One of the reasons is, that the steel cost is pretty high.
But that can be changed, if the contractors starts to use companies, out of their normal group. Cost reductions should be a goal for all involved parts in the projects, and steel is one of the high cost areas.
I also think that Shell handles this in a wrong way, as the project beneficts to a huge saving of emissions.
But again. Everyone is focused on profit. Thats the business world, and all organisations are bound to focus on the highest possible profit, compared to invested money.
Let´s hope that another investor will see, that Ocean windmill parks is a must in the world today.
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