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Abu Dhabi's Masdar fund buys stake in £2.5bn Thames Estuary wind farm

By Sarah Arnott
Friday, 17 October 2008

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A business vehicle owned by the Abu Dhabi government has bought a 20 per cent stake in the London Array, the world's largest offshore wind farm development.


The multibillion-dollar partnership announced yesterday between E.ON and Masdar – a $15bn initiative launched by the state-owned Abu Dhabi Future Energy Company in January – includes plans for a number of projects, alongside the purchase of 40 per cent of E.ON's 50 per cent stake in the London scheme.

The London Array is central to the Government's environmental agenda and plans for both renewable energy and a secure energy supply. Senior representatives from Masdar and E.ON had meetings in 10 Downing Street yesterday to discuss progress on the scheme, which is expected to be up and running by 2012.

Sultan Al Jaber, the chief executive of Masdar, which means "the source" in Arabic, said: "London Array is an important investment for Masdar into the wind sector. We believe that the offshore wind market will be a major force in the future and this is a very opportune time for us to enter this developing segment of the renewable energy market.

"Through this project, we hope to build a partnership with the UK Government to drive the future growth of the renewable energy sector for the benefit of both our economies."

There were similarly positive noises from the Prime Minister. Gordon Brown said: "This is an excellent example of the partnership we need between oil-producing and oil-consuming countries to develop new energy sources and technologies, diversifying their economies and reducing our dependence on carbon."

Building work is due to start on the £2.5bn Thames Estuary development in 2010, but plans were thrown into confusion earlier this year when Shell pulled out and sold its stake, leaving E.ON and Dong Energy as 50/50 partners. Shell blamed pressure on resources pushing up the price of the scheme.

The London Array consists of 271 turbines on a 90-square-mile site more than 12 miles off the Kent and Essex coasts. The first stage, comprising 175 turbines, should be working by 2012. The second stage will take its capacity up to 1 gigawatt of electricity production – enough to power 750,000 homes, equivalent to a quarter of all domestic housing in the capital.

The development will contribute 10 per cent of the Government's target for a tenth of UK electricity to be from renewable sources by 2010.