Germany

Germany

RWE Innogy & Kvaerner scrap over Nordsee Ost

Dispute continues, as Norwegian EPC firm exits offshore wind

Kvaerner awaits an arbitration ruling, due in the first half of 2013, on its dispute with RWE Innogy over the supply of jacket foundations for the Nordsee Ost offshore wind station, the company told Windpower Offshore.

The two companies have been in dispute for more than a year, after Kvaerner requested compensation "for additional costs and schedule impacts of various changes to the scope of work and associated matters" in connection with the contract.

The €75 million deal was announced in June 2010, alongside a warning from RWE Innogy's then chairman, Fritz Vahrenholt, about potential delays to the station's grid connection.

The contract covered construction and delivery of 48 jackets for the wind station’s turbines and one "jumbo jacket" for Nordsee Ost’s offshore electricity substation. As of end of June 2012, 20 jackets had been completed, with 13 delivered to the client. "We are continuously producing the remaining jackets for delivery by end 2012," said Kvaerner.

Nordsee Ost "is a commercially challenging project," Kvaerner admitted to Windpower Offshore. "We have not recognised profit so far for this project and have also communicated to the market that we do not expect to recognise profit in 2012."

The engineering, procurement and construction (EPC) company’s failure to make a profit on the Nordsee Ost foundations is likely to played a role in its announcement earlier this month that it will exit the offshore wind market following contract completion.

Previously, Kvaerner supplied tripod foundations for six of the twelve 5MW turbines at Alpha Ventus.

Kvaerner says it is not contracted to provide maintenance and repairs for either of the projects, beyond any warranty obligations.

Nordsee Ost was the first of RWE Innogy’s offshore wind projects for which it agreed terms for the supply of foundations, rather than relying on a project partner or tier 1 contractor to do so. Since then, it has agreed the foundation supply contract for Gwynt y Môr.

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