The government and the Crown Estate have attempted to downplay concerns about its investment in the UKs fledgling offshore wind industry, after plans to build a giant 10MW turbine in Newcastle were this week shelved.

A spokeswoman from the Crown Estate today confirmed it has ended an agreement to buy the first 10MW Britannia prototype from Clipper Windpower, after Clippers parent company, United Technologies Corporation (UTC), halted the project.

UTC has now repaid the £1.6m plus VAT invested by the Crown Estate, which will not be invested in another wind turbine prototype project.

The Crown Estate spokeswoman maintained that the Clipper investment had achieved its goal of stimulating the UKs offshore wind supply chain ahead of the next wave of Round 3 offshore wind farm projects.

Clipper had also received £300,000 of a £4.4m grant from DECC to build Britannias blades.

However, payments were stopped earlier this year when Clipper failed to meet terms and conditions attached to the grant. The Britannia turbine had been expected to be delivered at the end of 2011, but Clipper failed to meet certain development milestones and the rest of the grant was not released.

A DECC spokesman said it would consider requesting the initial £300,000 is repaid. He also confirmed that none of a £2.5m grant to develop Britannia gearbox systems was paid out.

"This decision is a commercial matter for the company, he said. "Our natural resource and competitive advantage mean we have one of the biggest markets in the world and through actions set out in our Renewable Energy Roadmap we are making progress to develop the supply chain."

The Britannia turbine had become something of an icon for the UKs emerging offshore wind industry, with predictions that it would be as big as the London Eye once completed.

But the project had been under financial strain for some time. UTC bought the remaining 50.5 per cent stake in Clipper that it did not already own last October, in a bid to secure the US-based firms short-term future.

Significantly, UTC has cited increased competition in the market as a reason for shelving the plans.

Since the agreement, turbine makers including Siemens, Vestas, Gamesa, GE and Doosan have announced plans to manufacture larger offshore turbines in the UK, many of which are expected to boast capacities of between 5MW and 7MW.
source:APEC-VC Korea