Shell to exit London Array wind project

The Netherlands' Royal Dutch Shell (NYSE: RDS.A) has dealt a blow to the London Array wind project, announcing that it plans to sell its stake in the wind farm and shift its wind power focus to the U.S.

With a planned capacity of 1 gigawatt of power, the London Array is expected to be the world's largest offshore wind farm, consisting of 341 turbines covering 90 square miles in the Thames Estuary, east of London (see U.K. approves two massive windpower projects).

"This is business as usual," said Maria McCaffery, chief executive of the British Wind Energy Association. "Consortia come together to deliver large scale wind farms and then often re-group at various stages of project development, for instance at the planning stage, or once the bids from subcontractors come in."

McCaffery said, "While it's easy to understand the frustration from the other scheme partners at the delay this announcement will cause, the fundamentals of the project and the wider industry haven't changed."

Shell is one of three shareholders in the big wind project, along with German utility E.ON (OTC: EONGY) and Denmark's state-controlled DONG Energy.

Shell has reportedly approached the U.K.'s Centrica and other utilities about a sale of its London Array stake.

The project, which is expected to cost £2 billion to construct, was set to be complete in 2010.

Since approving the London Array, the U.K. government has moved forward with plans for even more wind (see U.K. aims for 33GW of wind).

The government said it plans to approve 33 GW by 2020, allowing companies to develop up to 25 GW of offshore wind, in addition to the 8 GW already in the works.