Siemens Bags Wind Turbine Order That May Be Worth $1.2 Billion

(Bloomberg) — Siemens AG won an order from Dong Energy A/S
to supply turbines to a U.K. offshore wind farm. The deal may be
worth as much as $1.2 billion, according to an analyst.

Siemens will supply 91 of its 6-megawatt turbines the Race
Bank farm to be built on Britain’s east coast, the company said
in a statement on its website Friday. Installation is expected
to start in 2017 and the project set to begin working in 2018,
when it will produce enough power for about 400,000 homes.

The project may cost as much $2.6 billion and the deal be
worth up to $1.2 billion based on today’s costs, according to
Tom Harries, an analyst at Bloomberg New Energy Finance.

Siemens didn’t provide financial details on the deal.

Offshore wind is one of the most expensive clean-energy
technologies, costing about $175.6 a megawatt-hour compared with
about $90.7 for coal, Bloomberg estimates show. U.K. developers
plan to cut the renewables figure to about $156 a megawatt-hour
by the turn of the decade. Costs have already dropped as much as
11 percent over five years, Siemens said in the statement.

Dong also chose Siemens as favored supplier to its Hornsea
Project One offshore wind farm off the U.K. coast, the developer
said Friday in a separate release. If the order proceeds, 171 of
Siemens 7-megawatt turbines will be installed, making the
project the largest sea-based wind farm in the world.

Project investment may be as high as $6.36 billion and the
deal worth as much as $2.86 billion, Harries said. Dong plans a
final investment decision on the facility in the second half of
next year. It declined to disclose any financial details.

The U.K. has the largest amount of installed offshore wind
capacity in Europe, with a total of 4,494.4 megawatts, according
to European Wind Energy Association estimates.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Tony Barrett

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