EuroPower.com

The British Wind Energy Association (BWEA) says the problems faced by E.ON and Energi E2 are shared by many other members. As many as 10 offshore projects are partly stalled because of these and other problems, BWEA told the Guardian.

LARS MAGNUS GUNTHER

Jason Scagell, director of E.ON UK Renewables, said: "We've taken a close look at the tenders and have reluctantly decided that building Scarweather simply isn't possible under current market conditions. Demand for the supply of key components such as turbines, offshore cabling and foundations is so high at the moment that it's very difficult to make projects cost effective."

Danish partner Energi E2, also pointed to the cost of offshore cabling as another problem area inhibiting the development of offshore schemes.

The BWEA said almost all 10 of the similar schemes given the go-ahead under the government's first round of offshore licensing were delayed by this or other issues such as difficult contract negotiations.

Gordon Edge, head of offshore at the BWEA, said: "The tax credit scheme in the US has led to the construction of large projects in that country, which is sucking up supplies from all parts of the world. Because this scheme might only last for the next two years no one is building new [wind turbine] factories but they are taking advantage of higher prices and lower risk offered by these American onshore projects. This is diverting supplies away from the UK and elsewhere."

There are hopes that the problems will be short-lived but Mr Edge said they did raise new questions about the government's ability to meet its targets on cutting carbon dioxide output to counter global warming. But he also believes that people have underestimated how hard it is for a new industry to develop without bottlenecks and delays. Signing contracts is much slower than for building oil or gas platforms because suppliers and others are wary of the level of innovation and the higher political risk, he explained.

British offshore schemes are particularly vulnerable because they are more expensive but seen by the public as more desirable as they have less impact on the skyline compared with onshore projects.

(2005-12-06 08:26:52)