London Array Now A 50/50 Joint Venture

E.ON and Dong Energy are to become 50/50 partners in world’s largest offshore wind farm, the 1-gigawatt (GW) London Array project after they agreed to buyout the stake previously owned by Shell, for an undisclosed sum. The move follows Shell’s announcement that it is withdrawing from the project saying that it could gain a better return on its renewable energy investments in the U.S. market.

“We’re pleased that, together with Dong Energy, we’ve been able to secure the future of the project, and we’d also like to thank Shell for their contribution to the project’s significant progress to date. That also means that we hope to be able to keep the project on track and we should be able to complete the first phase by the end of 2012, subject to securing a number of important contracts, such as those for the wind turbine,” said Dr. Paul Golby, CEO of E.ON UK.

Shell has committed to leave its staff on the project until the end of the year to enable a smooth transition and handover of the project, which is located in the Thames Estuary

Mike Lewis, managing director Europe of E.ON climate & renewables, warned that the economics of the project remain a challenge. However, he added that the flagship project will give invaluable experience.

“That means that we can take the lessons we learn from London Array for future projects that are further offshore and, potentially, even larger,” he said.

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