UPDATE 1-New 367 MW offshore wind farm opens in UK

Thu Feb 9, 2012 9:39am EST

Related Topics

* To supply 320,000 homes with renewable energy a year

* UK plans to raise offshore capacity to 18 GW by 2020

LONDON Feb 9 (Reuters) - A new 367 megawatt offshore wind farm opened off the Cumbrian coast in Britain on Thursday and will supply up to 320,000 households with renewable power a year, the companies behind the project said.

The 1 billion pound ($1.58 billion) Walney wind farm is a joint venture between utilities DONG Energy, SSE and OPW, a consortium of the Dutch pension fund service provider PGGM and Ampere Equity Fund.

The companies claim Walney is the world's biggest offshore windfarm, with 102 wind turbines, each with a capacity of 3.6 MW.

It was the first UK offshore wind farm to receive investment from a pension fund service provider and equity fund before it had been built.

"This investment in clean energy is aligned with the criteria in the investment policy for our clients and investors and further cements our focus on expanding renewable energy as asset class," said Dennis van Alphen, OPW director.

Britain has more than 1.5 gigawatts (GW) of installed offshore wind power and plans to raise the capacity to 18 GW by 2020.

However, offshore wind has been criticised for being too expensive. The government wants to reduce the price of generating energy from offshore wind to around 110 pounds/MW from the current 150 pounds/MW by 2020 so it can reach its capacity target.

Some companies are trying to bring down the cost to make offshore wind competitive.

"We want to industrialise the way we produce offshore wind farms, by doing them not project by project but at a continuous pace," Dong's chief executive Anders Eldrup told reporters on a conference call.

"We support the principle of the feed-in tariff system...as it gives more clarity to investors, making it easier to bring pension money into projects like this," he added, referring to a government subsidy scheme for renewables.

Last October, the government announced that offshore wind farms will receive subsidies until 2015, which will subsequently be reduced by 5 percent. Onshore wind farms, which are less costly to build, will see subsidies cut gradually by 10 percent.

More than 100 members of parliament wrote to the Prime Minister at the weekend, urging that subsidies paid to the wind industry are cut due to inefficient and intermittent energy production and in a climate of economic constraint.

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