DONG Energy to build world's largest offshore wind farm

DONG Energy to build world's largest offshore wind farm DONG Energy

SEPTEMBER 11, 2017— Within days of completing the dismantling of the world's first offshore wind farm, Denmark's DONG Energy has been awarded a contract to build what will be the world's largest: Hornsea Project Two.

The giant farm will be built at the lowest-ever price for offshore wind in the U.K. At GBP 57.50 (about $75.84) per MWh, the strike price for the Contract for Difference (CfD) is 50% lower than the previous round of CfD allocations just two years ago, demonstrating the rapid reduction in cost across the industry.

Under the U.K.'s contracts-for-difference (CfD) system, the strike price is the guaranteed price at which DONG can sell electricity generated by the wind farm.

Hornsea Project Two will be built 89 km from the Yorkshire coast and is expected to be operational from 2022.With a capacity of 1,386 MW, enough to power over 1.3 million UK homes, it will even surpass the 1,200 MW Hornsea Project One which DONG Energy is currently constructing.

"We have always promoted size as a key driver for cost," says Samuel Leupold, Executive Vice President and CEO of Wind Power at DONG Energy. "The ideal size of an offshore wind farm is 800-1,500M W, and therefore it is natural that Hornsea Project Two will deliver record-low costs to society. At the same time, the low strike price demonstrates the cost saving potential of developer-built offshore grid connections, which in the U.K. is included in the project scope."

The Contract for Difference is a 15-year contract which will be indexed for inflation. After 15 years, Hornsea Project Two will receive the market price for electricity.

Unlike recent offshore wind projects awarded in Germany, Denmark and the Netherlands, the Hornsea Project Two scope will also include the construction of offshore and onshore substations and the transmission cable connecting the turbines to the onshore substation, such assets to be sold to an offshore transmission licensee following construction.

WORLD'S FIRST OFFSHORE WIND FARM DISMANTLED

In a further mark of industry maturity, DONG Energy this month completed the dismantling of the world's first offshore wind farm, the Vindeby farm near Lolland in the southeast of Denmark.

It was constructed in 1991 as a demonstration project and proved to be a great success, but after more than 25 years of operation, Vindeby's eleven wind turbines were worn down, and DONG Energy therefore decided to decommission the farm.

During its entire lifetime, Vindeby Offshore Wind Farm has generated 243 GWh of power. This corresponds to what seven of the largest offshore wind turbines today can generate in a single year – or what DONG Energy's largest project to date, Hornsea One, can generate in 17 days. ​

HornseaP2 map

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