Update: Dong to hold new turbine tender for 900MW Gode Wind trio
Dong will tear up any existing turbine agreements former owner PNE Wind had made for Gode Wind 1, 2 and 3, and will open a new tender for the offshore projects, the company tells Recharge.
The Danish utility today announced that it had purchased the German North Sea projects from PNE, fattening its mid-term project pipeline by about 900MW.
PNE had originally intended to use Vestas turbines at Gode Wind 1 and 2. But in March the German developer revealed that it had tapped REpower as the preferred supplier for Gode Wind 1, after deciding that it wanted to use larger, next-generation turbines for the project.
REpower’s 6MW turbines would be ready in time for the planned 2015 commissioning, while Vestas’ 7MW machines would not, PNE told Recharge at the time.
A spokesman says Dong is still open to using REpower turbines, but adds that neither REpower nor Vestas are now considered preferred suppliers.
Dong, not PNE, will be responsible for making the final supply-chain decisions, he says.
Only last month Dong signed a framework agreement with Siemens for 300 of its 6MW offshore turbines totalling 1.8GW, for use at UK projects.
However, Dong has emphasised that it intends to foster competition in the turbine market, and does not want to become reliant on one provider. It is partnered with Alstom for the three French projects it won alongside EDF.
Dong will pay €57m ($70.5m) upfront for the projects, and as much as €100m more as various milestones are passed.
PNE must obtain full consents for Gode Wind 3 by January 2014 in order for that part of the deal to proceed.
Gode Wind 1 and 2 both have all their permits from the German government and unconditional grid connections from TenneT totaling 584MW of capacity.
PNE has applied for consents at Gode Wind 3, and expects to receive an answer next year.
The sale represents a breakthrough for PNE, a German developer with a long track record in onshore wind, but whose stretching offshore ambitions have been hit hard by the financial crisis.
Late last year PNE announced it had sold Gode Wind 2 to Danish private-equity firm Brancor Capital Partners, only to see that deal collapse a few months later after Brancor missed its first payments.
The Dong spokesman tells Recharge that while the projects have “been interesting to us for a very long time”, formal negotiations with PNE only began when it became clear that the Brancor deal might fall through.
“It’s been a hectic few months of talks,” he adds.
PNE’s original time table for Gode Wind 2 now looks likely to slip, with Dong’s acting chief executive Carsten Krogsgaard Thomsen indicating that construction is unlikely to begin before 2015.
Thomsen says the Gode Wind trio fills a key gap in Dong’s pipeline, although he emphasises that the Danish utility has not made any final investment decisions.
Dong, the world’s top offshore wind developer, is currently building the Lincs, London Array and West of Duddon Sands projects in the UK, Borkum Riffgrund in Germany, and Anholt in Denmark.
The latter project must be finished by the end of next year in order to qualify for subsidies as part of Dong’s arrangement with the Danish government.
Earlier this week Dong’s credit rating was given a negative outlook by ratings agency Standard & Poor, which noted that the state-owned utility’s second-quarter results came in below expectations, and added that Dong’s core thermal and gas divisions face strong competitive headwinds.
Note: Update revises earlier version, adds news that Dong will stage new tender for wind turbines