Three Dong Energy’s Offshore Wind Farms Backed by UK Government

Henrik Poulsen, Chief Executive Officer of Dong Energy , said: “These awards represent the successful conclusion of the Electricity Market Reform (EMR) process that has been ongoing over the last few years. It shows that the UK is an attractive place to invest in offshore wind; not only for its great natural resources, but also because of the stable investment environment created by EMR.”

Brent Cheshire, Dong Energy’s UK Country Chairman , said: “These contracts will allow us to deliver over £5 billion of investment in the pipeline of projects we have in the UK. They will enable continued growth and investment in the UK supply chain as well as making an important contribution to reducing the cost of offshore wind for the benefit of all consumers.”

Subject to European Commission State Aid approval, the contracts will support the development of Dong Energy’s Burbo and Walney offshore wind farm project extensions, as well as the first GW of the Hornsea project.

When operational, the three new projects will together be capable of supplying the electricity needs of almost two million UK homes.

FID enabling contracts were introduced by the Department of Energy and Climate Change to bridge the gap between Renewable Obligation mechanism, which has operated since 2002, and the new Contracts for Differences arrangements which will shortly come into effect under the provisions of the Energy Act 2013.

The contracts are designed to avoid a hiatus in the phased introduction of electricity market reforms designed to attract the investment needed to replace the UK’s energy infrastructure. They provide companies like Dong Energy with enough certainty to make final investment decisions on its projects.

Final implementation of the FID contracts will be subject to State Aid approval from the European Commission.

Press release, April 23, 2014; Image: Dong Energy