Vattenfall Blows Rivals Away for Largest Nordic Windfarm

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Sweden's Vattenfall AB (Stockholm) has undercut its rivals with the lowest bid yet to secure the 600-megawatt (MW) Kriegers Flak offshore windfarm contract from Denmark's government.

The company's winning bid of 49.9 euro ($54.3) per megawatt hour (MWh) pushed Vattenfall ahead of rivals including DONG Energy A/S (Fredericia, Denmark), Germany's Energie Baden-Württemberg AG (EnBW) (FWB:EBK) (Karlsruhe, Germany) and Spain's Iberdrola S.A. (BMAD:IBE) (Bilbao, Spain). Kriegers Flak will be Denmark's largest offshore windfarm, capable of generating enough power for more than 600,000 homes--23% of Denmark's population.

"Today we are making history, and Denmark is cementing its position as a global showcase and leading country for offshore wind power," said Lars Christian Lilleholt, Minister for Energy, Utilities and Climate. "The price of offshore wind power is plummeting and offshore wind power has become significantly more competitive. The government sees a number of advantages in completing Kriegers Flak. State aid for Kriegers Flak is far below the expected levels in the Energy Agreement, in sharp contrast to nearshore wind turbines for which aid costs have increased significantly. Kriegers Flak will link the Danish and German electricity systems and bolster security of supply of green electricity on Zealand."

"The announcement is an essential milestone for our ambition to increase our production of renewable power," said Vattenfall Chief Executive Officer Magnus Hall. "We are already the second-largest offshore player globally. The winning bid of 49.9 euro per MWh proves that Vattenfall is highly competitive and brings down the costs for renewable energy."

Pending a final investment decision, Kriegers Flak will cost 1.1 billion to 1.3 billion euro ($1.2 billion-1.4 billion) to construct.

Gunnar Groebler, Head of Vattenfall Wind, added: "Our winning bid for Kriegers Flak is 58% below the original cap of 0.12 euro cent per kilowatt hour. For the Danish Near Shore project the bid was also substantially below its cap. Proceeding with these two projects, Vattenfall provides Denmark with a cost-efficient contribution to meet the country's climate targets and customers' demand for renewable energy."

In September, Industrial Info reported that Vattenfall had secured the Danish government's controversial Danish Near Shore project. Comprising the Vesterhav Syd and Vesterhav Nord windfarms on the west coast of Jutland, they will have a combined generating capacity of approximately 350 MW. For additional information, see September 14, 2016, article--Denmark Awards 350-Megawatt Wind Contract to Vattenfall.

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