DONG buys 300 Siemens wind turbines for offshore UK

July 19, 2012 by  
Filed under Green Energy News

Thu Jul 19, 2012 8:11pm IST

COPENHAGEN (Reuters) – Danish group DONG Energy DOENRY.UL is to buy 300 giant new wind turbines from German group Siemens (SIEGn.DE) for offshore Britain, marking a step forward in efforts to site ever larger units at sea to boost renewable power output.

State-owned DONG will buy the German engineering group’s 6-megawatt turbine, a model with 75-metre blades for offshore installations being tested in prototype in Denmark and for which state-owned DONG Energy is the first customer for Siemens.

While DONG gave no value for Thursday’s transaction, which is for a total capacity of 1,800 MW, as a rule of thumb wind turbines cost around 1 million euros ($1.23 million) per MW.

Installation at British wind parks will be from 2014-17.

The deal reinforced Siemens as the leading offshore turbine supplier. It supplied 108 of 132 offshore turbines installed in Europe in the first half of 2012, according to the European Wind Energy Association.

Siemens said the deal would help it optimize production of the 6 MW turbine and strengthen its market position as a supplier of offshore wind turbines.

DONG’s move followed a decision by Britain on Tuesday to delay for a second time an announcement on subsidy levels for renewable energy, risking further delays in projects and adding to uncertainty for energy investors.

In capacity terms, the agreement matches a 2009 deal between DONG and Siemens for up to 500 3.6 MW turbines, the world’s biggest deal of its kind at that time, DONG said.

DONG’s acting chief executive, Carsten Krogsgaard Thomsen, called it an important step for the wind industry that would help make offshore wind more competitive.

“The agreement will enable DONG Energy to install a significantly larger turbine from 2014 compared to the turbines, we know today,” Thomsen said.

So far, the biggest turbine in service at DONG Energy wind farms is the Siemens 3.6 MW, though DONG aims to install two of the 6 MW units at its Gunfleet Sands offshore wind farm in Britain later this year, making them the first at a real wind park.

Environmental group WWF said the deal reaffirmed Britain’s potential to be a leader in offshore renewable energy, adding that government indecision was creating uncertainty for investors who needed certainty beyond 2020.

“This deal is fantastic news for the UK but it is coming despite, not because of, what the government is doing,” said Jenny Banks, energy policy officer at WWF-UK.

Offshore wind installations typically cost 2.0-2.5 as much to build as onshore wind parks, but strong winds can help make offshore turbines yield up to 40 percent more energy.

As big as the new 6 MW turbines will be, Siemens is also developing a 10 MW unit.

Under the new deal, DONG Energy is committed to pay a fee in case of cancellation of projects under the agreement, it said.

DONG Energy and Siemens are now working on projects with total capacity of about 2.0 GW under construction at Lincs, London Array and West of Duddon Sands in Britain, Borkum Riffgrund 1 in Germany, and Anholt offshore wind farm in Denmark. ($1 = 0.8154 euro)

(Reporting by John Acher; Editing by William Hardy and Dan Lalor)

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