London Array Partners Award Almost EUR2 Billion Of Contracts

The world's largest offshore wind farm

Partners in the U.K.'s London Array, the world's largest offshore wind farm, said Monday that they have awarded contracts worth almost EUR2 billion to begin construction of the first phase of the project.

Germany's E.ON AG (EOAN.XE), Denmark's DONG Energy A/S, and the UAE's Masdar said that they have signed six major supply and installation contracts with seven European suppliers to build the initial 630 megawatts of the farm's 1-gigawatt capacity.

Located off the southeast coast of England, London Array will provide enough electricity to power around 750,000 homes on completion, a quarter of Greater London. Offshore work is scheduled to start early in 2011, with phase one construction finished by the end of 2012.

"Signing these contracts is a significant milestone for the London Array project," said Frank Mastiaux, chief executive of E.ON Climate & Renewables. "The completion of these contract awards marks a major step toward making the project a reality and establishing offshore wind as a viable electricity supply option."

Supply and installation contracts have been awarded to Nexans Norway; Siemens Transmission and Distribution Ltd. (SI); JDR Cable Systems; Visser & Smit Marine Contracting; Global Marine Systems Limited; a joint venture between Per Aarsleff A/S (PAAL-B.KO) and Bilfinger Berger Ingeniuerbeau GmBH (GBF.XE); and Future Energy, a joint venture of Fabricom, Iemants and Geosea.

Last year, the future of London Array was cast into doubt when Royal Dutch Shell PLC (RDSB.LN) pulled out of the project due to rising costs, choosing instead to focus on the U.S. market. However, the project was resuscitated after the U.K. government increased its support for wind technology by raising the financial incentive for offshore wind farms.

The largest contract, worth around EUR1 billion, was signed in May 2009 with Siemens Wind Power, who will be supplying 175 turbines for the first phase of the project.