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Budget 2009 Analysis: Five off-shore wind farms will go ahead after Budget cash boost

Construction of five off-shore wind farms and dozens of on-shore turbines has been secured by Alistair Darling’s promise to pump hundreds of millions of pounds into the industry.

The chancellor earmarked £525 million in the Budget for off-shore wind energy projects over the next two years. He also unveiled a new deal with the European Investment Bank to provide up to £4 billion for investment in renewable infrastructure projects.

The £525 million will be streamed into the Renewables Obligation Certificates scheme, essentially making it more attractive for companies to sell wind energy.

Following the announcement, Danish energy group Dong confirmed it would move forward with plans to build its Walney II wind farm in the Irish Sea.

The scheme, which will be built by Siemens Wind Power, is now expected to be completed by 2012.

British Wind Energy Association spokesman Charles Anglin said the Budget announcements would help five off-shore and dozens more on-shore farms, totalling more than 5GW, “come to fruition”.

He said: “If these firms had not been able to come to financial close on their projects, not only would they have been delayed, some of them would have been cancelled.”

The five already-approved off-shore sites are:

  • London Array, Thames Estuary – being developed by E. On, Dong and Masdar;
  • Gwynt y Môr, north Wales – RWE npower renewables;
  • Walney II, Cumbria – Dong Energy;
  • West of Duddon Sands, Scotland – ScottishPower, Dong and Eurus Energy; and
  • Lincs, Lincolnshire – Centrica Energy.

The BWEA has estimated it has £10 billion worth of “shovel-ready” wind projects across the UK, of which about £2.5 billion would be spent directly on construction and installation.

In a new report on renewables, the group estimated about 20GW of new wind farm sites could be built in UK waters over the next decade.

Mr Anglin said the money earmarked in the Budget would make “a very big difference” to the industry by opening up a crucial flow of capital.

However he said the financial support needed to be followed up with improvements to the planning system.

He said: “I think today we need to congratulate the Government on grasping the nettle on the financial issues. Tomorrow, yes, we need to look at the other issues.”

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