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The world's largest offshore wind farm, to be constructed in the Thames estuary, has been given the go-ahead.
The decision comes only three weeks after Chancellor Alistair Darling's Budget doubled the financial incentives — now worth hundreds of millions of pounds a year — to build it.
The £2 billion London Array will initially install 175 turbines the height of the Big Ben clock tower 12 miles off the coasts of Essex and Kent.
They will be capable of powering nearly half a million homes in the capital and could be up and running by the Olympics in 2012.
London Array has been four years in the planning and is a flagship project in Labour's attempts to promote green energy.
However, it was in danger of becoming a major embarrassment as proposals appeared to stall after original backer Shell quit the scheme saying it did not believe it could be a commercial concern.
Its backers today pushed the button on the project readily admitting it is to go ahead only after the intervention of the Chancellor.
In a statement, the venture partners — German-owned UK power firm E.On, Danish energy company Dong, and Abu Dhabi investment vehicle Masdar — said: “Today's announcement comes after the UK Government's recent proposal to increase its support for offshore wind power. The partners are satisfied the project is now financially viable.”
In the Budget, Darling said offshore wind farms would be subsidised with the issuing of two ROCs or renewables obligation certificates for every unit of power they produce. Previously the incentive regime was limited to one ROC per unit.
ROCs are handed out to green energy firms for every megawatt hour of clean electricity they produce.
The ROCs can then be traded with polluting companies like coal-fired power stations which have to buy ROCs commensurate with the amount of carbon dioxide they emit.
In recent years ROCs have been traded in this secondary market at an average of around £47 per ROC.
When London Array is fully functional later in the next decade with a capacity of 1000 megawatts it is reckoned the wind farm will be producing on average 350 megawatts per hour.
That would mean London Array would be attracting 17,000 ROCs a day which, annualised and at current prices, would be worth nearly £300 million a year.
London Array would also make money selling the electricity to the National Grid.
Reader views (3)
This is great news. I've never understood what certain people's problem has been with calling wind farms an "eyesore" etc. I think they look great, its a long term energy solution and it is possible that green energy is certainly the way forwards in helping us pull out of a recession and sustaining the UK energy needs afterwards more effectively.
I'd be happy to see wind farms and other green energies used all over the country rather than Nuclear energy or imported gas or oil.
- Paul R, London
"The partners are satisfied the project is now financially viable.”
Lucky them: I'm a taxpayer, and I'm not satisfied at all. So we have a technology that doesn't burn coal, just money. The same money spent on insulation and LED lighting would cut far more carbon than this unsightly gesturism. If any plant is going to be stuck in the sea, why on earth is it not using wave or tidal power?
- Mdj E10, london uk
So what happens to the birds who use the Thames Estuary? Oh, forgot - nothing matters except profit does it? Silly me! Pity the machines don't actually produce any electricity worth having.
- Judith C, London, England
