The Department of Trade and Industry's (DTI) offshore wind capital grants program has three competitive bidding rounds for a total £74 million of funding. The DTI had originally planned to allocate only £14 million under this first round. But both companies apparently received the full amount they bid for.
Wilson says the aim of the grants program is "to deliver an early contribution to the renewables obligation and emissions reduction, support the development of the industry and equipment supply chains, provide a learning experience which can improve confidence and help reduce future costs so that future projects can proceed without the need for grant support." National Wind Power confirms that its capital grant triggers the release of a £74 million turnkey contract for construction of North Hoyle. The contract goes to a consortium of turbine manufacturer Vestas Celtic Wind Technology and Mayflower Energy. The turbines will be manufactured at Vestas' plant at Machrihanish on Kintyre, Scotland.
Completion next year
The wind farm will be the first to deploy Mayflower's turbine installation vessel, currently being built in China, which will be capable of operating without the need for support vessels. Orders to the tune of 85% of the total £80 million project value will be placed with UK based companies and around 140 jobs will be created during construction, and seven jobs when the wind farm is operational. National Wind Power expects to start construction in early 2003, with completion in autumn 2003.
By contrast, Powergen Renewables' plans for an early start on building its Scroby Sands wind farm have been thwarted. The company had hoped to start work on the £75 million project in 2002, with completion in 2003. "We set ourselves quite a tight timetable, but the onshore work is not in place to enable us to make a start now," says the company. "We are now looking at getting the procurement process finalised and getting it signed off."
The reason for the delay, apparently, is that Powergen Renewables felt that companies bidding for the onshore work were taking advantage of the tight timetable and charging too much for construction. Although the delay in signing contracts is expected to be only a few months, constraints preventing work on the project during the tourist season mean that while construction will begin in 2003, it will not be completed until 2004.
North Hoyle and Scroby Sands are the first projects to gain all necessary consents out of 18 potential offshore wind farms around Britain's coast. Fifteen further developers are still progressing their projects after one developer backed out. But, even allowing for some projects to fall at the consenting stage, with only £54 million left in the capital grants pot, there is unlikely to be enough money to go round. The deadline for bidding for the next round of capital grants is December 31.