DONG awarded German offshore projects
The German Bundesnetzagentur has awarded DONG Energy the right to build three offshore wind projects in the German North Sea. For two of the projects - OWP West and Borkum Riffgrund West 2 - DONG Energy made bids at zero EUR per MWh
“The zero subsidy bid is a breakthrough for the cost competitiveness of offshore wind, and it demonstrates the technology's massive global growth potential as a cornerstone in the economically viable shift to green energy systems. Cheaper clean energy will benefit governments and consumers – and not least help meet the Paris COP21 targets to fight climate change”, says Samuel Leupold, Executive Vice President and CEO of Wind Power at DONG Energy.
“Still it’s important to note that the zero bid is enabled by a number of circumstances in this auction. Most notably, the realization window is extended to 2024. This allows developers to apply the next generation turbine technology, which will support a major step down in costs. Also, the bid reflects the fact that grid connection is not included”, says Samuel Leupold.
DONG will be responsible for the turbines, array cables and offshore substation, while grid operator TenneT will be responsible for construction, operation and ownership of the onshore substation and the export cable.
Cost-drivers enabling the zero subsidy bid:
Platform change: Significantly bigger turbines – probably 13-15MW – will be on the market by 2024. With bigger turbines, the developer can increase electricity production while at the same time reduce the number of turbine positions. This contributes significantly to cost reductions during construction (fewer towers and array cables, and lower costs for installation vessels and manpower) as well as during a lifetime of operations and maintenance
Scale: OWP West and Borkum Riffgrund West 2 will be combined into one large-scale project with the option of adding additional volume in next year’s auction to further increase the total size of the project.
Location: The projects benefit from average wind speeds of more than 10 m/s, which is among the highest wind speeds measured across DONG Energy’s portfolio of wind farms. Also, the projects are located next to DONG Energy’s Borkum Riffgrund 1&2 which means that operations and maintenance can be done from DONG Energy’s existing O&M hub in Norddeich.
Extended lifetime: The German authorities have approved the possibility to extend the operational lifetime of the asset from 25 to 30 years.
Not full scope: Developers were not bidding for the grid connection in the German auction, which means that grid connection is not included in the bid price.
Source: DONG Energy