Royal Dutch Shell says it is considering bidding for rights to develop offshore wind farms in UK waters as the British-Dutch oil and gas giant seeks to re-enter the nation’s sector after a 10-year absence.
Dorine Bosman, Shell’s wind chief, said the company was interested in seabed leases due to be awarded during 2019 by the Crown Estate, which controls Britain’s coast.
The Dutch-based firm left the UK offshore wind sector when it sold its stake in the London Array project 10 years ago.
A global pioneer in the field, the UK was one of the key offshore wind markets Shell wanted to enter, she said.
The oil major says it is investing US$2 billion a year in developing “new energies” or low-carbon power.
Shell co-owns a minor offshore wind farm in the Netherlands and a larger Dutch project which is under construction. In December it spent US$175 million entering the tiny US market, acquiring the rights to New Jersey and Massachusetts seabed leases that could potentially generate 4.1 gigawatts of wind power.
Britain, the world’s largest offshore wind market, generated about 6 per cent of its electricity from turbines at sea in 2017.
There are more than 1,900 turbines with a capacity approaching 8GW operating and projects capable of generating another 6GW under construction.
Firms acquire seabed rights from the Crown Estate and then look for the financial backing to make a project viable through auctions that award subsidy contracts from the authorities.
The Crown Estate is planning to hold auctions for England, Wales and Northern Ireland during 2019, including at Dogger Bank, the southern North Sea, East Anglia, north Wales and the Irish Sea.
Government subsidy contracts worth £60 million annually are expected to support a further 4GW of projects through auctions in the spring.
Bosman told the media: “We think our strengths are in offshore logistics and project development and execution. Once all of the contracts are signed and they have taken the final investment decision and they are ready to start rolling the steel and building it, that’s probably too late for us.”
Shell has also agreed to buy up to 100MW of electricity from a California wind project being developed by Terra-Gen.
Shell said it signed a long-term power purchase agreement with Coachella Hills Wind. The Palm Springs project aims to repower the existing Coachella Flats and Painted Hills wind farms by December 2020.
Shell is looking to reduce its oil dependence. Picture credit: Wikimedia