Siemens Supplying Turbines to $3 Billion U.K. Offshore Wind Farm

(Bloomberg) — ScottishPower Renewables Ltd. selected
Siemens AG to deliver turbines for a U.K. offshore wind farm in
a deal that may be worth almost half the 2 billion-pound ($3.1
billion) cost of the project.

The utility chose Siemens as its preferred supplier to
deliver as many as 102 of its 7-megawatt systems to the East
Anglia One wind farm off Britain’s east coast, ScottishPower
said in an e-mailed statement. The deal is the largest yet for
an approved facility in the country’s wind-power industry, it
said, and it may be worth as much as 850 million pounds.

The project will be “the most cost-effective offshore wind
farm ever delivered,” ScottishPower Renewables Chief Executive
Officer Keith Anderson said in the statement. “Selecting the
turbine supplier will be the single largest agreement for East
Anglia One, and the most significant in terms of achieving
important cost-reduction goals.”

Offshore wind is currently one of the most expensive clean-energy technologies costing about $176 a megawatt-hour compared
with electricity from coal at about $91, Bloomberg estimates
show. U.K. developers plan to cut this to 100 pounds, or about
$153, a megawatt-hour by the turn of the decade.

ScottishPower’s facility will produce electricity at about
119 pounds a megawatt-hour and it will receive premium payments
for its power through the U.K. government’s so-called contracts-for-difference auction. The project will create about 3,000 jobs
and when it’s complete in 2020 it will be able to power about
half a million homes.

Using the Siemens systems could aid in reducing costs
through fewer turbines being required for the same sized
project, Tom Harries, an analyst at Bloomberg New Energy
Finance, said in an e-mailed response to questions.

More than half of the facility’s components and services
will be made and sourced in the U.K. and Siemens will use its
manufacturing plant in Hull to make the turbine blades.

The U.K. is Europe’s largest offshore wind market,
accounting for more than half of all installed capacity at 813
megawatts, according to estimates from the European Wind Energy

To contact the reporter on this story:
Louise Downing in London at

To contact the editors responsible for this story:
Reed Landberg at
Ana Monteiro, Dylan Griffiths

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