Dong Buys into U.S. Offshore Wind
Dong Energy has entered the U.S. offshore wind market with the company’s first project outside Europe.
The Danish energy company has agreed to take over RES Americas Developments Inc.’s more than 1000MW newly assigned development project rights off the coast of Massachusetts.
Samuel Leupold, Executive Vice President of Wind Power at Dong, said: “The U.S. is an interesting market for offshore wind with the potential to become a significant area for future development. We already have a number of post 2020 projects in our pipeline in North-Western Europe that we will continue to develop. With the takeover of the offshore wind development project in the U.S., we will broaden our geographical scope and follow the market potential outside of our current footprint.”
The Massachusetts lease has a total size of 760 square kilometers, is located approximately 90 kilometers from shore. Water depth is between 40-50m.
“The site conditions are quite similar to those we currently work with in North-Western Europe, which means that the project could be developed using well-known technology and logistics,” said Leupold.
A draft policy bill to support the regulatory conditions for offshore wind has been introduced with the Massachusetts government aiming to provide a stable framework that will enable the build-out of projects and the creation of new jobs.
Earlier this year, Dong acquired the remaining 66.66 percent ownership interest in the UK offshore wind development Hornsea Project One from its joint venture partner SMart Wind. Hornsea Project One is located 120km off the Yorkshire coast and covers approximately 407 square kilometers.
Hornsea Project One is one of the three projects for which Dong was awarded a Final Investment Decision Enabling contract (Contract for Difference) by the UK Government in April last year. With the Contract for Difference, Dong will receive a fixed price per MWh of electricity produced for the first 15 years of operation.
Hornsea Project One is expected to enter into commercial operation around 2020, provided that a final investment decision will be taken.
2014 marked a breakthrough for Dong’s plans to secure a pipeline of projects to meet its target of a total installed offshore wind capacity of 6.5 GW in 2020. The deciding factor was the award of subsidies for the three UK offshore wind farm projects Burbo Bank Extension, Walney Extension and Hornsea. Against this background, the company decided in December to go ahead with the Burbo Bank Extension project.