DONG Energy has been awarded the concession to build the 350 MW Borssele 1 and 2 Offshore Wind Farms off the coast of the Netherlands at a price of €72.70/MWh ($A108/MWh) – the cheapest in the world.
The cost breakthrough was announced by Dong Energy on Monday, when it said that the Netherlands’ Minister of Economic Affairs had awarded the company the concession to build the Borssele 1 and 2 Offshore Wind Farms, which will each have a capacity of 350 MW.
The wind farms will be located 22 kilometers off the west coast of the Netherlands, in a water depth of 14 to 38 meters, using monopile foundations.
Dong Energy won the concessions with an average bid strike price, excluding transmission costs, of €72.70 per MWh over the first 15 years of the contract — after which, the two wind farms will receive the market price.
Trade group WindEurope described the price as being “beyond even the most optimistic expectations in the market.” It is below Dong’s own targeted cost for 2020 of €100 per MWh.
Dong said the costs have been driven down through innovations in wind turbines and blades, continuous improvements of foundation design and installation methods, higher cable capacity, a growing and competitive supply chain and the synergies from building large-scale capacity sites such as Borssele 1 and 2.
In addition, the Dutch sites offer good seabed conditions as well as good and stable wind speeds, which contribute to high output from each turbine.
“Winning this tender in a highly competitive field of bidders is another proof of our market-leading position and our business model which builds on continued innovation, industrialization and scale,” said Samuel Leupold, Executive Vice President and Head of Wind Power in Dong Energy.
“With Borssele 1 and 2, we’re crossing the levelized cost of electricity mark of EUR 100 per MWh for the first time and are reaching a critical industry milestone more than three years ahead of time. This demonstrates the great potential of offshore wind.”
The Dutch tender regulation requires that DONG Energy complete Borssele 1 and 2 within four years.
“The Dutch government has introduced an ambitious, long-term development plan for offshore wind,” explained Country Manager for DONG Energy Netherlands, Jasper Vis.
“The Borssele concessions mark a milestone in the Netherlands’ shift towards green energy, and we look forward to bringing our more than 20 years’ experience with offshore wind into these projects.”
Source: Cleantechnica. Reproduced with permission. RenewEconomy added some content to this story.