China Invests in Scottish Offshore Wind Farm


China Daily UK has recently reported that the Energy company, China Three Gorges Europe, which is also called CTG EU, has invested 35 million pounds ($44.3 million) in a large Scottish offshore wind farm, which when completed will have the capacity to power one million homes.

CTG EU, which is controlled by State-owned China Three Gorges Corporation, acquired a 10 percent stake in the Moray East offshore wind project from Portuguese renewable energy company EDP Renovaveis.

The two companies signed an investment cooperation agreement in 2015 that gives CTG the option to acquire up to 30 percent of the project.

EDP remains the largest stakeholder in the project (33.3 percent), followed by French utility company ENGIE (22.3 percent), Mitsubishi-subsidiary Diamond Generating Europe (16.7 percent), Japanese utility company Kansai Electric (10.02 percent), CTG EU (10 percent) and Tokyo-based Mitsubishi UFJ Lease & Finance (6.68 percent).

Moray East is a 950-MW offshore wind project 22 kilometers off the coast of northeast Scotland. Construction of the 100-turbine farm is due for completion early next decade. When up and running, the wind farm will meet the average energy need of 1 million British households.

Moray East will generate power at 57.50 pounds per MW hour, which is less than half the price of power generated by most offshore wind farms under construction in the United Kingdom today. This price will be on a par with onshore wind and solar prices and will be cheaper than new gas, according to projections from the UK government.

“Moray East marks a major milestone in the progress of the offshore wind industry,” said Moray East board director Dan Finch. “Not only will it deliver plentiful, sustainable, renewable power, it will do so at a highly competitive price — to the economic advantage of both the household and the country.”

The project was the second wind farm to participate in a Contract for Difference, or CfD, auction in the UK. CfDs were set up by the UK government to incentivize investment in renewable energy. Under the scheme, developers are paid a set price for power generated throughout a 15-year period.

The UK is a world leader in offshore wind, with a total of 5.3 GWs of installed offshore wind capacity, which is more than one third of the global total of 14.4 GWs. Wind contributed 15 percent of the UK’s energy mix in 2017.

China is undergoing its own renewable energy revolution, and the nation plans to install 5 GWs of offshore wind capacity by 2020.

On Thursday, State Power Investment Limited, one of five major electricity generation companies in the Chinese mainland, received approval from local authorities to construct three new projects with a combined capacity of 1,100 MWs off the coast of Jiangsu province in East China.

Chinese energy companies frequently collaborate with Northern European contractors on domestic offshore projects, and they have also invested heavily in European offshore wind farms.

Last year, State-owned energy company China Resources bought 30 percent of the 402-MW Dudgeon wind farm in Norfolk for 555 million pounds.

The original author of the above piece, Angus McNeice, also included a short description of the pioneering offshore wind farms in Scotland, i.e. Hywind, which “has started to deliver electricity to the Scottish grid since 2017. The 30MW wind farm, operated by Statoil in partnership with Masdar, is located 25 kilometers offshore Peterhead in Aberdeenshire, Scotland and powers approximately 20,000 households.”

This move has among others, several implications. It might be considered China’s confidence in the economic efficiency and financial prospects of the offshore windfarm industry, in the operational capacility of the world’s largest offshore windfarm installer, i.e. the United Kingdom, and the increasing willingness to capitalize on the growth momentum of the alternative energy sector not only at home, but also abroad.