Wind farm firms and MoD agree on radar costs deal

Energy companies and the Ministry of Defence have agreed a deal to jointly fund costly radar equipment upgrades, breaking an impasse that threatened to stop several major offshore wind projects in their tracks and blow the Government's highly ambitious renewable energy goals off course.

The framework agreement will be unveiled "imminently", according to sources close to the situation. Forged after energy executives infuriated by several MoD objections took their case directly to the Prime Minister, the accord will be signed by Des Browne, the Defence minister, John Hutton, Business Secretary, and Adam Bruce, chairman of the British Wind Energy Association.

The MoD has objected to at least four major offshore projects, many of them years into the planning and development process, on national security grounds, arguing that offshore wind farms in the direct line of sight of radar stations create holes in its radar coverage and larger shadows at lower altitudes.

Energy companies were furious at the MoD's objections, having been told previously that there were no issues. The ministry's opposition, they said, imperilled millions of pounds of investment, and sent the wrong message to an industry that the Government has shown a keen interest in growing.

This week, the Crown Estate named 11 new offshore areas that it says could be developed. The sticking point in the negotiations, led by BERR, has been over who should pay for radar or the hi-tech equipment necessary to ensure that stations, primarily those on the east coast, can function properly. The upgrades could cost more than £100m, and the ministry, which is struggling with a budget hole of at least £2bn, balked at covering the costs on its own.

The new deal lays the groundwork for a joint funding scheme, though the proportions of who pays what is still unclear. The MoD has also not agreed not to issue "automatic objections" to proposed projects.

It is understood that the sides reached the agreement after Gordon Brown stepped in. His administration has made green energy a centrepiece issue.