New Danish offshore wind farm lowers cost of technology by one third

An offshore wind project set to built off the west coast of Jutland is being billed as the cheapest wind projects in Europe – and one of the cheapest in the world – after locking in a price of nearly one-third that of existing wind farms, the Danish Climate Ministry announced on Friday.

The tender for the Horns Rev 3 wind farm was won by Sweden-based Vattenfall Vindkraft, at an agreed a price of 10.31 Eurocent per kWh, 32 per cent less than the 14.07 Eurocent (15.15 Eurocent in fixed 2015-prices) being charged by the nearby Anholt Offshore Wind Farm.

In the UK – the largest market for wind turbines – the cheapest parks currently being built cost 15.33 Eurocent / kWh in 2015.

According to the Danish government, the low price of the Horns Rev 3 project can be attributed to technological developments and a “very successful tendering process,” that involved extensive dialogue and negotiations with bidders.

Ultimately, said the minister for climate, the low price of the farm could save Danish consumers around €295 million over the next 11-12 years – the period during which the offshore wind farm will be getting subsidies.

Thereafter, the Horns Rev 3 facility will produce electricity at the market price and will no longer receive any form of subsidy.

“With Horns Rev 3 Denmark is making windmill history through realising a significant reduction in the cost of establishing offshore wind farms,” said Minister for Climate, Energy and Building Rasmus Helveg Petersen.

“The low price is not just good for Denmark, but also for the international green transition. The general decline in prices in the market for wind power means that offshore wind power is now well on its way to becoming a viable competitive alternative to traditional fossil fuels.

“At the same time, we have developed an efficient procurement model which the whole of Europe can take inspiration from,” he said..

The successful bid has already been approved by the signatories of the Energy Agreement 2012 and must now be adopted by parliament and signed into law. The government will present the bill on March 18 and the proposal is expected to be adopted during April with the backing of a large political majority in parliament.

It is hoped that construction of the offshore wind farm will be completed by 1 January 2020, with the first turbines to be connected to the grid three years earlier, in 2017.

Electricity production from the completed park will be enough to supply the needs of 450,000 households.