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Released September 14, 2016 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Denmark's government has awarded its controversial nearshore wind tender to Sweden's state-owned energy company Vattenfall (Stockholm) after the company presented the lowest bid.
The company's winning bid was 0.475 kroner ($0.07) per kilowatt-hour (kWh), far below the government's guideline price of 0.70 kroner ($0.10) per kWh. The winning price equates to roughly $71 per megawatt-hour (MWh), which is well below the current European norm, but wind deployment costs are falling fast and construction is not expected to start until 2019. Denmark gets more than 40% of its electricity from wind--the highest rate in Europe.
The two proposed windfarms are Vesterhav Syd and Vesterhav Nord on the west coast of Jutland with a final combined generating capacity of approximately 350 megawatts (MW). Government support for the projects is expected to be in the region of 3.6 billion kroner ($543 million), almost double what was previously estimated. However, Denmark's government is still debating whether or not to scrap support for nearshore windfarms as the country's renewable energy costs have spiralled.
Magnus Hall, Vattenfall's chief executive officer said: "We have worked extremely hard with this offer and our efforts have been rewarded. This is a major step for our company in respect of our sustainability aspirations. We previously announced that we wish to invest 5 billion euro ($5.6 billion) in sustainable development over the next five years and increase our wind power production in all countries where we are present. Denmark is a core market for us. We have been involved in wind power in the Denmark for almost 20 years now, and this is an important achievement for our portfolio, as it enables us to provide sustainable energy for 375,000 households."
Despite awarding the contract, the government is still not happy with the rollout of windfarms. Announcing the award, Climate Minister Lars Christian Lilleholt said: "It is no secret that the government wants to abandon the construction of the coastal wind turbines, which we will continue to work towards for three reasons. Firstly, the major coastal turbines of around 180 metres in height blemish the beautiful Danish coastline and destroy our unique natural scenery along the west coast. Secondly, the government believes windfarms should be further away from the coast. Finally, support costs to the coastal wind turbines almost doubled since we made the energy agreement in 2012."
Lilleholt added: "The bid from Vattenfall shows that the running costs of windfarms has fallen dramatically, which in itself is good news. It's great that the industry has managed to lower the price so quickly."
The contract award to Vattenfall comes just six months after the government scrapped plans for the nearshore tender, claiming that the electricity produced would cost too much for Danish consumers. In March, Lilleholt told media: "Since 2012 when we reached the political agreement, the cost of our renewable policy has increased dramatically. We can't accept this, as the private sector and households are paying far too much. Denmark's renewable policy has turned out to be too expensive."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The company's winning bid was 0.475 kroner ($0.07) per kilowatt-hour (kWh), far below the government's guideline price of 0.70 kroner ($0.10) per kWh. The winning price equates to roughly $71 per megawatt-hour (MWh), which is well below the current European norm, but wind deployment costs are falling fast and construction is not expected to start until 2019. Denmark gets more than 40% of its electricity from wind--the highest rate in Europe.
The two proposed windfarms are Vesterhav Syd and Vesterhav Nord on the west coast of Jutland with a final combined generating capacity of approximately 350 megawatts (MW). Government support for the projects is expected to be in the region of 3.6 billion kroner ($543 million), almost double what was previously estimated. However, Denmark's government is still debating whether or not to scrap support for nearshore windfarms as the country's renewable energy costs have spiralled.
Magnus Hall, Vattenfall's chief executive officer said: "We have worked extremely hard with this offer and our efforts have been rewarded. This is a major step for our company in respect of our sustainability aspirations. We previously announced that we wish to invest 5 billion euro ($5.6 billion) in sustainable development over the next five years and increase our wind power production in all countries where we are present. Denmark is a core market for us. We have been involved in wind power in the Denmark for almost 20 years now, and this is an important achievement for our portfolio, as it enables us to provide sustainable energy for 375,000 households."
Despite awarding the contract, the government is still not happy with the rollout of windfarms. Announcing the award, Climate Minister Lars Christian Lilleholt said: "It is no secret that the government wants to abandon the construction of the coastal wind turbines, which we will continue to work towards for three reasons. Firstly, the major coastal turbines of around 180 metres in height blemish the beautiful Danish coastline and destroy our unique natural scenery along the west coast. Secondly, the government believes windfarms should be further away from the coast. Finally, support costs to the coastal wind turbines almost doubled since we made the energy agreement in 2012."
Lilleholt added: "The bid from Vattenfall shows that the running costs of windfarms has fallen dramatically, which in itself is good news. It's great that the industry has managed to lower the price so quickly."
The contract award to Vattenfall comes just six months after the government scrapped plans for the nearshore tender, claiming that the electricity produced would cost too much for Danish consumers. In March, Lilleholt told media: "Since 2012 when we reached the political agreement, the cost of our renewable policy has increased dramatically. We can't accept this, as the private sector and households are paying far too much. Denmark's renewable policy has turned out to be too expensive."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
