Talisman’s Beatrice Wind Farm Demonstrator Project achieved three significant milestones in 2007, including first power in May, installation of the second turbine in July and full operations in November. By year-end, the turbines could provide up to 80% of the Beatrice platform’s daily electricity requirements via subsea cable.

The two 87-metre high, 5 MW wind turbines located 25 kilometres off the east coast of Scotland are the biggest offshore wind generators ever constructed. The project is a joint venture between Talisman and Scottish and Southern Energy to test wind power technology in deeper water far from shore.

Over the next three to five years, Talisman will monitor the technical performance and environmental impacts of the Project to gain a better understanding of the potential of large-scale offshore wind farm developments as a practical and economic source of renewable energy.

The turbines have been wired from seabed to blade tip through the use of SCADA control systems. These fiber optic cable and strain gauges, used by Talisman and its partners in the DOWNVInD (Distant Offshore Windfarms with No Visual Impact in Deepwaters) Research and Technology Development program, will monitor the structural stresses in the turbines resulting from wind and waves. The data gathered in the monitoring program will allow the Company to compare actual performance data with the models created prior to installation.

Although the monitoring program has demonstrated the wind potential of the Moray Firth, with capacity factors of 50-55%, compared with 40% assumed in initial projections, the operating performance of the turbines remains to be assessed to determine the electrical output of the turbines. The project has cost $90 million or about $9 million per megawatt of installed generating capacity. Comparatively, most gas-fired power stations cost less than $1.5 million per MW installed energy to build, thus significant economic barriers remain.

Talisman continues to consider the construction of a full-scale offshore wind farm of up to one gigawatt output linked to the Beatrice platform. A commercial venture of this size could generate almost 20% of Scotland’s current electricity demand (enough energy to power a million average UK homes). However, this vision of a commercial wind farm can only be realized if costs can be brought down.

The Company believes that scale, increased government incentives for wind energy, improving technology (including larger, higher output turbines and reduced production and operating costs) may improve the economics of constructing a large-scale wind farm. However, until those issues are addressed, thoughtful deliberations regarding the project’s renewable energy production output, potential revenue generation and future capital requirements are needed.

Talisman’s Beatrice Wind Farm Demonstrator Project is a central part of DOWNVInD, which includes 18 different organizations from six European countries and has received funding from the Scottish Executive, the UK Department for Business, Enterprise and Regulatory Reform and the European Commission.