Masdar and E.On said the deal was the first step in a broad initiative to collaborate on renewable energy projects. "We're looking at all areas of technology, all possibilities and all opportunities," said Rebecca Middleton, an E.On spokeswoman. "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," the British prime minister Gordon Brown said yesterday at a signing ceremony in London.
Sultan al Jaber, the chief executive of Masdar, said the Abu Dhabi company and E.On hoped to help the UK government "drive the future growth of the renewable energy sector". Following the transaction, Dong is the London Array's lead partner with a 50 per cent stake, while E.On's holding has been reduced to 30 per cent. The two European companies held equal stakes after Shell walked away from its investment citing cost concerns that raised questions about the development's future. Shell said at the time that it was quitting the British project to pursue wind-power opportunities in the US, where government incentives for investment were more favourable.
The involvement of a new partner backed by a petro-state's resources would help alleviate British environmentalists' fears that, with energy prices falling, the wind project could face serious delays or cancellation. However, it is unclear whether Masdar's deal with E.On may amount to a financial rescue. Last month, E.On placed a US$1.4bn (Dh5.1bn) order with the German specialist manufacturer Siemens for 500 wind turbines for delivery to projects in Europe and the US. It had previously earmarked ?6bn (Dh29.7bn) for renewable energy investment.
Nonetheless, only 1.2 gigawatts of European offshore wind capacity had been installed by the end of last year, compared with 57 GW of onshore capacity, mainly because the cost of bringing offshore turbines into production is about 50 per cent higher. Despite the big run-up in energy prices earlier this year, many offshore wind projects found themselves in less viable economic territory as construction costs also soared.
With a planned 1 GW of generating capacity - the same as a typical coal-fired or a small nuclear power plant - the London Array ranks as a giant among wind-power ventures. When built, its 341 turbines to be located in south-east England's Thames Estuary would supply about one per cent of the UK's total electricity needs. In January, the Abu Dhabi Government announced plans to invest $15bn in Masdar. The company last month bought a ?120 million stake in the Finnish wind-power company WinWinD. firstname.lastname@example.org