Scottish Power cancels £5.4bn Argyll Array offshore wind farm plan 

Scottish Power has abandoned a £5.4bn plan to build the world’s largest offshore wind farm, after four years of planning, because it is “not financially viable”.

The decision not to go ahead with the Argyll Array, which would have provided green energy for 1 million homes, is another blow to the government’s plans to tackle a looming supply problem and to meet its low carbon targets.

RWE, another of the big six power companies, announced two weeks ago that it was abandoning plans to construct a £4bn offshore wind farm, the Atlantic Array, off Devon. On Thursday, Centrica, owner of British Gas, announced it was selling its stake in another huge offshore wind farm, Race Bank, off East Anglia.

But the Scottish Power move is a particular setback because the company admits that the conditions at Argyll Array, off the coast of Tiree in the Inner Hebrides, are some of the best in the UK. It is a favourite spot for windsurfers. The wind farm was to have up to 300 turbines capable of producing 1,800 megawatts, three times more than the current largest wind farm – the London Array, off Kent – and almost 60% of the output of EDF’s planned new Hinkley Point C nuclear plant. Energy groups have complained that the subsidies available for new wind projects are not high enough. Many have also warned that the lights could go off without more power capacity.

Jonathan Cole, head of offshore wind at Scottish Power, said: “We believe it is possible to develop the Argyll Array site; it has some of the best wind conditions of any offshore zone in the UK. However, it is our view that the Argyll Array project is not financially viable in the short term.

“The rate of progress in development of foundation and installation technology has been slower than anticipated.”

Scottish Power said the main problems affecting the project were the ground conditions on the site, particularly the presence of hard rock, coupled with challenging wave conditions that could make construction more difficult. It also blamed the presence of basking sharks, which environmental groups continue to study to get a greater understanding of their activities in the area.

The wind farm has long been the target of a No Tiree Array group, which yesterday welcomed the decision by the developer, calling the plans an “environmental disaster for Tiree and the west coast of Scotland”.

Earlier this week, Keith Anderson, chief corporate officer of Scottish Power, argued that the “carbon price floor”, which taxes companies for burning fossil fuels, should be shelved by the government because it would make the UK’s remaining coal plants largely uneconomic by the middle of the decade. With Britain’s spare power margin already forecast to fall as low as 2% by 2015, the carbon tax would force more closures and “threatens to make us even more vulnerable to the risk of blackouts”.

Scottish Power, owned by Iberdrola of Spain, also warned recently that Ed Miliband’s promise to freeze domestic power prices in a bid to help struggling consumers risked discouraging further investment. It said it would continue to show its commitment to UK offshore wind, with the much smaller 389MW West of Duddon Sands project currently under construction in the Irish Sea.

An application for consent was also submitted in 2012 with Vattenfall for the East Anglia ONE offshore windfarm, which could have a capacity of up to 1,200MW.

RenewableUK, the lobby group for wind power, played down the Argyll Array decision. Maf Smith, the organisation’s deputy chief executive said: “The fact that not all wind farm projects go ahead is a natural part of the development process. Some encounter physical obstacles or financial challenges which mean that they aren’t viable for the time being – although they will be in the future, as cutting-edge wind turbine technology is developing at an astonishing rate.”