Denmark Picks Bidders for Major Offshore Project

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - The Danish government has given the green light to four companies to bid for the country's next major offshore wind project, Horns Rev 3.

The Danish Energy Agency (DEA) has prequalified Statoil ASA (NYSE:STO) (Stavanger, Norway), E.ON Wind Europe AB (Dusseldorf, Germany), Vattenfall Wind Power (Stockholm, Sweden) and DONG Energy Wind Power (Frederica, Denmark) for the 400-megawatt (MW) Horns Rev 3 project, located in shallow waters in the eastern North Sea, about 15 kilometres (km) off the westernmost point of Denmark.

The park, which will be able to supply the needs of some 400,000 households, is the first to be constructed as a result of the government's Energy Agreement of 2012 which called for a doubling of the country's wind power by 2020. To boost competitiveness in the bidding process, the key criterion for selecting the winner will be price.

"The Danish Energy Agency today is prequalifying a range of both known and new players in the Danish wind power market," explained Morten Bæk, the CEO of the Danish Energy Agency. "The outcome is highly satisfactory considering both the number and profile of the prequalified applicants. It is difficult to imagine a more competitive field in today's market. Strong competition is the key to lowering the costs for offshore wind energy."

The requirements for prequalification have been changed to 'create more competition and bring new players and financial institutions to the Danish market', the DEA explained. There are now more relaxed requirements for financial and economic capacity compared to the last bidding process for the Anholt offshore project in 2010 -- which received only one bidder. There is also an assurance that those prequalified are fit to handle the task.

According to Climate, Energy and Building Minister Martin Lidegaard, speaking in December: "Instead of sitting behind closed doors this time, we have chosen to implement some of the most open and transparent procurement measures the industry has ever seen. It has secured a massive interest in the Danish projects".

The new windfarm will join the existing Horns Rev I and Horns Rev II windfarms. Horns Rev I was constructed in 2002 and became the world's first large scale offshore wind farm in the world with a generating capacity of 160 MW. The park produces around 2% of Danish electricity consumption. It is owned by Vattenfall (60%) and state-owned energy company DONG Energy (40%).

Construction of Horns Rev II began in 2008 and was commissioned in 2009 by DONG. It has a generating capacity of 209 MW.

At the start of last year, wind energy accounted for more than 30% of Denmark's electricity, according to the Danish Wind Industry Association. This is a 2% improvement over 2011. Denmark is the leading wind energy country in the world.

The next large offshore development to go to the bidding will be the 600 MW Kriegers Flak windfarm located in waters between Denmark and Germany. The 400 MW Anholt Offshore windfarm, was commissioned last year and is capable of generating around 4% of the country's electricity.

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