Development of the world’s largest offshore wind farm is under threat because of Sterling weakness, the project’s co-sponsor revealed this week.
The pound’s fall in value against the Euro has increased the cost of wind turbine components for the 1GW London Array.
The scheme is part-funded by Abu Dhabi’s renewable energy fund Masdar. Its project director of utilities and asset management Zihad Tassabehji said its financial viability needed to be re-examined. "At the time we made the commitment for the project the pound was worth [much more]," said Tassabehji, speaking at the World Future Energy Summit in the Emirate on Monday.
The project would be situated in the Thames Estuary, east of London, and will consist of up to 271 turbines, generating enough power for 750,000 homes.
Funding is split three ways – Masdar owns 20%, E.ON 30% and Danish energy firm Dong 50%. Masdar joined the scheme in October, replacing Shell who exited to develop onshore schemes in the US.
Since then, the pound has fallen from €1.28 to €1.07. E.ON Climate & Renewables chief executive Frank Mastiaux said the initial business plan assumed an exchange rate to be as high as €1.34. "Procurement of equipment largely comes in the Euro world, and revenue comes in the pound world, and that makes it difficult," said Mastiaux. Despite these fears, Mastiaux said the tendering process for the £3bn project would continue.