DONG Energy and E.ON, the partners in the consented Scarweather Sands offshore wind farm in Swansea Bay, have today announced that they have decided against proceeding with the construction of the project.

A lease for the project was awarded to the partners by The Crown Estate as part of the first round of developments of offshore wind in UK waters.  It was viewed as a demonstration scale site to allow companies to gain experience for future, larger developments.

However, the challenging seabed conditions, relatively poor wind speeds at this location and a restriction on turbine height have meant that, as Scarweather is just 30 turbines, the project is no longer commercially viable.

Dave Rogers, Regional Director of Renewables for E.ON, said: "This is not a decision that we've taken lightly, a lot of work has gone into trying to make the project work but, sadly, we've had to recognise that we can't go ahead.

"Put simply it has become clear that Scarweather Sands is not the best place to build a small scale offshore wind farm.                                   

"We've learnt a lot from this development which has helped us in successfully delivering other larger projects and rather than carry on for the wrong reasons, we've decided not to build the wind farm."

Christina Grumstrup Sørensen, Vice President of DONG Energy Renewables, said: "DONG Energy has experience constructing offshore wind farms successfully under challenging conditions. In the case of the Scarweather Sands site, there were too many downsides to make the project commercially viable."

"We have, however, not lost confidence in the further development of the UK offshore market, and we are committed to proceeding with our other UK wind projects."

Rob Hastings, Director of the marine estate at The Crown Estate said: "At 1.03GW the UK has more installed offshore wind farm capacity, either operational or being commissioned, than any other country in the world. For Round 3 we developed our marine spatial planning tool MaRS, which aims to facilitate strategic and integrated decision making for the marine environment so we are confident that other windfarm sites are viable.

"We will shortly be announcing Round 3 which aims to deliver 25GW by 2020. This is an important step in UK offshore wind capacity and will provide the UK with a secure, alternative green energy source. This is another step towards the successful delivery of 40GW by 2020 that industry has put on the table. Developers remain committed to consenting, building and operating offshore wind farms in suitable locations."

E.ON and DONG Energy are also partners, together with Masdar, in the 1GW London Array project, the world's largest consented offshore wind farm which is due to be built in the Thames approaches in 2012.

Ends

Notes to editors:

E.ON

• E.ON is one of the UK's leading power and gas companies - generating and distributing electricity, and retailing power and gas - and is part of the E.ON group, one of the world's largest investor-owned power and gas companies. We employ more than 16,000 people in the UK and around 90,000 worldwide;
• E.ON's retail business is a leading energy supplier in the UK with around 5.5 million electricity and gas customers, covering domestic, SME and industrial. E.ON also offers central heating and boiler care;
• The generation business produces enough electricity to cater for the needs of around eight million homes from a portfolio of world-class gas-, coal- and oil-fired power stations;
• We're one of the leading green generators in the UK, with 20 wind farms located from Cornwall to Northern Ireland. We own and operate one of the UK's largest dedicated biomass power stations at Lockerbie. Combined, our renewable portfolio generates enough green energy to power the homes in a city the size of Manchester;
• Our green development portfolio could power over a million homes and displace the emission of almost two million tonnes of carbon dioxide a year by building new onshore and offshore wind farms, biomass power stations, and tidal stream and wave power schemes;
• Our target is to cut the carbon released by each kW of electricity we generate by 10% between 2005-2012, having already reduced it by 20% since 1990;
• We have 1,300MW of renewable capacity under development.

DONG Energy

DONG Energy is one of the leading energy groups in Northern Europe. We are headquartered in Denmark. Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe. We have approximately 6,000 employees and generated more than DKK 60 billion (EUR 8.2 billion) in revenue in 2008.

DONG Energy is a market leader within offshore wind power, having built around half of all offshore wind farms globally.

The UK is one of DONG Energy's primary markets concerning offshore wind. DONG Energy is the sole owner of the 90MW Burbo Bank and owns 50% of the 90MW Barrow project, both of which are in commercial operation in the East Irish Sea. The construction of Gunfleet Sands I+II (total 172MW) was started in early 2008 in the Thames Estuary and is scheduled for commercial operation in the beginning of 2010. Furthermore, DONG Energy has a substantial pipeline of offshore wind projects in the UK which are currently under planning and development. For more information, please visit www.dongenergy.com

The Crown Estate

• The Crown Estate is an estate valued at more than £6 billion, including substantial blocks of urban property, over 120,000 hectares (300,000 acres) of agricultural land in England, Scotland and Wales, and around half the foreshore, together with the seabed out to the 12 nautical mile (nm) territorial limit.
• Every year it pays its entire revenue surplus to the Treasury for the benefit of all UK taxpayers. In 2008/09 this amounted to over £226 million.
• As owners, managers and guardians of one of the world's most important and diverse urban, rural and marine property portfolios, The Crown Estate is underpinned by three core values of commercialism, integrity and stewardship.
• The CrownEstate'smarine properties include more than half of the UK's foreshore (17,000 km), 55 per cent of the beds of tidal rivers and estuaries and almost the entire seabed out to the 12 nautical mile territorial limit around the UK. It also includes the rights to the natural resources in the UK Continental Shelf, with the exception of oil, coal and gas. The Crown Estate issue leases for the development of wind farm sites within the 12 nm (nautical mile) territorial limit, whilst the Energy Act 2004 gives us rights to issue leases for development beyond the territorial limit within the Renewable Energy Zone (REZ) out to 200 nm.
• The CrownEstate manages its assets on a commercial basis, guided by the principles of sustainable development and social responsibility. We are committed to sustainable and long-term management of these unique assets.
• In 1999 The Crown Estate established its programme of Marine Stewardship to provide funding to support practical projects, relevant research, and other initiatives that improve the status and management of the marine estate.

For more information contact:

Jonathan Smith, E.ON, on 024 7618 3676 or jonathan.smith@eon-uk.com

Andreas Krog, DONG Energy, on +45 9955 2023 or ankro@dongenergy.d