Dong Energy has announced winning a bid for an offshore wind project off the Dutch coast that is set to break records in terms of costs.

The Danish firm say the two offshore wind farms involved will be built for €72.70 a megawatt hour, well below the €103 MWh record set last year by Sweden’s Vattenfall for a scheme off the coast of Denmark.
Dong Energy turbine with engineer
“This is the cheapest we’ve ever seen by a long way and it puts offshore wind on a par with what it costs to build a new coal or gas power station,” said Oliver Joy, a spokesman for the wind industry trade group, WindEurope.

FT reports that the deal does not include the cost of transmission cables and equipment linking the project to onshore power networks but  wind industry executives said that adding in such costs would still put Dong’s project at about €87 MWh.

The company had originally set a cost target of €100 MWh by 2020.
                                                                                                                    Pic Credit: Dong Energy
“We are reaching a critical industry milestone more than three years ahead of time. This demonstrates the great potential of offshore wind,” said Samuel Leupold, head of wind power at Dong.

Three factors have proved crucial to bringing the cost of offshore wind down – the relatively low cost of the steel used to build offshore wind turbines helped as did the cheaper cost of capital available in the Netherlands.

Finally, the tumbling cost of oil played a part due to a glut in offshore installation vessels used to transport the massive wind turbines out to sea.

Along with several other companies, including wind turbine makers such as Germany’s Siemens, the group said they believed offshore wind farms could be “fully competitive” with new fossil fuel power stations under the right conditions.

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