(Bloomberg) — Siemens Financial Services GmbH and
Mainstream Renewable Power Ltd. sold an offshore wind
development area to Dong Energy A/S that has the potential to
provide as much as 4 percent of the U.K.’s electricity demand.
If developed to its full 4-gigawatt capacity, the Hornsea
zone may require an investment of as much as 12 billion pounds
($19 billion), Mainstream said Friday in an e-mailed statement.
That’s enough to power as many as 3 million homes, it said.
Dong, the largest operator of offshore wind parks, bought
the first 1.2-gigawatt phase of the zone off the Yorkshire coast
from Siemens and Mainstream in February. The purchase of the
entire area means it can now develop a further two facilities,
one of which is expected to receive planning consent in the
middle of next year, according to the statement.
Dong has invested about 6 billion pounds in U.K. offshore
wind, said Samuel Leupold, executive vice president. The size of
Hornsea and “high generation potential” will help the company
as it strives to cut the costs of electricity from sea-based
wind farms.
Offshore wind is one of the most expensive clean-energy
technologies, costing about $176 a megawatt-hour compared with
an average $72 for coal, Bloomberg estimates show. U.K.
developers plan to cut that figure to about $156 a megawatt-hour
by the end of the decade.
Today’s acquisition may be worth 550 million euros ($624
million) to 750 million euros, according to Keegan Kruger, a
European wind analyst at Bloomberg New Energy Finance, citing
BNEF data.
“Despite being one of the biggest pre-construction
acquisitions to date, Dong will have to achieve significant
permitting milestones if it intends to fully develop one of the
world’s biggest offshore development areas,” Kruger wrote in an
e-mail.
The U.K. had almost 4,500 megawatts of installed offshore
wind capacity at the end of last year, the largest in Europe,
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
Randall Hackley, Dan Weeks