Denmark

Denmark

Dong acquires German offshore projects from PNE Wind

Developer dominates with 45% increase in pipeline capacity

The world’s leading offshore wind developer, Dong Energy, has acquired the rights to develop 900MW of new capacity in the German North Sea. It has purchased the Gode Wind 1, 2 and 3 projects from PNE Wind. The deal increases Dong's offshore wind pipeline by 45% and signals its intention to grow its German market presence.

The deal sees Dong paying €57m upfront for the three-phase development. Dong will make additional payments of up to €100m, as unspecified milestones are achieved. The projects are planned for an area 30km northwest of the island of Norderney

Increasing its already-dominant offshore wind portfolio is a strategic aim for Dong Energy. Its first-half 2012 results highlighted the capacity of its existing offshore wind assets to partially offset poorer performance in the European gas markets.

Last week, Dong published results detailing an 87% jump in H1 wind energy-related profits and a decline in its gas-related activities.

Commenting on the deal, Dong Energy acting chief executive, Carsten Krogsgaard Thomsen, said: "The Gode Wind projects in Germany are very interesting for us, as we, if a positive investment decision is taken, expect that construction of parts of the projects could begin by 2015, due to the available grid connection confirmations. This way, the projects have a good fit with DONG Energy’s project pipeline, ensuring that our installation sequence of building large-scale projects successively could work smoothly and help bring down the cost of energy from offshore wind power".

Gode Wind 1 and 2 have already been awarded permits allowing construction and operation, though Dong notes that "certain changes to the permits" would be necessary in order to make full use of the projects’ total capacity.

PNE Wind has non-binding agreements with REpower and Vestas to supply turbines for Gode Wind 1 and 2, but it is expected that Dong will review these. Gode Wind 1 and 2 have unconditional grid connection offers from transmission system operator, TenneT, but its ongoing financial difficulties mean that the scheduling of grid connection work is uncertain.

An application has been submitted for the construction and operation of Gode Wind 3, with a decision anticipated next year. Dong’s purchase of Gode Wind 3 is "conditional" upon receipt of all relevant permits occuring before the end of January 2014.

The sale of the Gode Wind projects is no surprise, given PNE Wind’s assurances to investors in July that it was close to agreeing a deal. The sale is expected to return PNE Wind to profit, after it reported an operating loss for the first three months (Q1) of 2012.

With about 2GW of offshore wind capacity already in its pipeline, Dong’s purchase of the Gode Wind projects increases its pipeline by 45%. Until the purchase of the Gode Wind projects, Dong's only German offshore capacity in development was Borkum Riffgrund.

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Windpower Offshore Events

Latest Offshore Wind Jobs