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Summary:

Oil giant Shell’s decision to pull out of the world’s biggest planned offshore wind farm to be built in Britain resulted in a storm of criticism last week. Politicians and environmentalists accused Shell of being “greedy” and “irresponsible” in the British media. Many also believe that […]

Oil giant Shell’s decision to pull out of the world’s biggest planned offshore wind farm to be built in Britain resulted in a storm of criticism last week. Politicians and environmentalists accused Shell of being “greedy” and “irresponsible” in the British media. Many also believe that the move is part of a larger trend by Shell away from its renewable energy initiatives.

And the future of the London Array wind farm seems uncertain now. Shell was one of the three shareholders in the project together with German power company E.On and Danish utility DONG Energy. When fully operational, the wind farm would have provided electricity to power 750,000 homes, or around a quarter of London — its 341 turbines would have generated 1,000 megawatts of power.

The decision of Shell is also a major setback for Britain as London Array has been the symbol of the country’s renewable energy future. Britain is having a hard time meeting the European Union’s target of producing 15 percent of the country’s total energy from renewables by 2020. London Array wind farm was designed to provide around 10 percent of the renewable electricity produced in Britain by 2010.

It seems ironic that the decision made by the oil giant that has marketed itself with its renewable energy plans came only days after the company reported record profits. Shell has declined to give a detailed reason for its decision to sell its 33 percent share in the wind farm. However, Shell has said it plans to pursue other wind projects in the US where government incentives are more competitive and permitting easier to obtain.

  1. We are beginning to see more and more situations like this where environmentalists are on both sides of the issue, fighting each other to prove who cares more about the Earth.

    The precautionary principle can sometimes grow so monstrous as to consume all action. If you want a great die-off to eliminate 95% of humans, fine. Just you go first.

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  2. Hannah Steiner Wednesday, May 7, 2008

    The idea of oil companies investing in alternative energy sources has always confused me, and this case perfectly demonstrates the dilemma. While public opinion pressures them to develop and invest in new, eco-friendly energy sources, these technologies are costly to create and have uncertain returns. Combine this riskiness with the exceedingly high profits of oil sales, and motivation to pursue alternative energy drops even lower.

    At some point in the future, when oil prices become too high for regular consumption, the experimental investments will payoff. However, it will be a long, expensive, and painful transition from oil to alternative energy, and not every company will survive.

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  3. [...] The first phase of the project, which will erect 175 turbines, is scheduled to be completed by 2012. But rising costs have plagued the project and forced the previous Big Oil partner, Royal Dutch Shell, to pull out earlier this year. [...]

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  4. [...] wind market by an oil giant. In May, Netherland’s Royal Dutch Shell announced that it would pull out of the massive London Array project, expected to be the largest offshore wind farm in the world [...]

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  5. [...] hit earlier this year when another oil company, the Netherland’s Royal Dutch Shell, sold its stake in the giant London Array project, which is expected to be the largest offshore wind farm in the world once complete. The London [...]

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  6. [...] to the United States. And in May, Netherland’s Royal Dutch Shell announced that it would sell its stake in the London Array, expected to be the largest offshore wind farm in the world when it’s [...]

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  7. [...] London Array in October after Netherlands’ Royal Dutch Shell pulled out of the big wind farm earlier in 2008. Masdar holds a 20 percent stake, with Germany’s E.ON maintaining 30 percent ownership and [...]

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  8. [...] is moving in on the UK wind market as companies such as Royal Dutch Shell and BP are moving out. The project is much smaller than the 1,000-MW London Array, but offshore wind can cost twice [...]

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  9. [...] of the project, slated for the Thames Estuary off the coast of London, fell into question after Shell pulled out of it last year. Masdar stepped in to help fill the void, only to raise concern again in January when it [...]

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  10. [...] various clean energy other than biofuels and pulled out of some high profile clean energy projects including the world’s biggest planned offshore wind farm to be built in Britain in 2008. But at the Wall Street Journal Eco:nomics [...]

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