The CEO of Denmark’s Dong Energy said the offshore wind giant has seen its confidence in the UK regulatory regime “increase quite considerably” in recent months.
Henrik Poulsen told financial analysts the UK
is a market where Dong believes it can continue to “invest quite considerably”
following recent policy developments.
Poulsen was asked if Dong’s decision to sell a 25% share of
the operating first phase of the London Array offshore wind farm – halving its stake – reflected a lower
confidence in the UK as an investment opportunity.
The Dong CEO said the two were unconnected. “I would
actually say our confidence in the UK regime has improved quite considerably in
the last four or five months.”
Dong has been in a “close dialogue” with the UK government
over the impact of its power market reforms. “This is a market where we can
continue to invest quite significantly,” said Poulsen.
The London Array stake sale reflected a case-by-case approach to
its analysis of its asset base, he said. It was just one part of a major divestment programme the proceeds of which, together with a controversial $2bn cash injection by Goldman Sachs and others, Poulsen insists has put Dong on a sound financial footing.
Dong has emerged as a stalwart of the British offshore wind
market at a time when some other major players – not least the UK-based utility
SSE – have scaled back their ambitions or expressed doubts.
Poulsen – speaking as the company released its full-year results
– said Dong has“good visibility” over how to reach its offshore wind target of 6.5GW by 2020.
“We quite frankly believe we can do this [offshore wind]
better than anyone else in the world,” Poulsen said.
Dong’s offshore wind pipeline will see work begin in the
first half of this year on the UK’s 210MW Westermost Rough, due to be fully-operational
in the first half of 2015.
Germany’s Gode Wind 1 and 2, totalling 582MW, are expected
to be fully operating in the second half of 2016.
Poulsen was asked if he could quantify progress made towards
Dong’s goal of reducing the costs of offshore wind power by 35-40% by 2020, to hit €100/MWh.
The Dong boss said he could not give a specific number but
deemed the ambition central to all its activities in the offshore wind sector.
Poulsen said the company is developing “roadmaps” for cost
cutting in every sub-section of an offshore wind development – foundations,
cabling, turbines etc.
He said he was “encouraged” by progress made so far and said
cost-reductions and “a meaningful price" on carbon could help make offshore wind
competitive with other technologies for the long term.