The past months have been a “game-changer” for Norwegian energy giant Equinor’s offshore wind division, chief executive Eldar Sætre said as the company presented a net loss during the third quarter of 2019 due to lower prices for oil and gas.
“The last few months have been a game-changer for our offshore wind business. Together with [SSE, we were the winning bidder with three projects at Dogger Bank in the UK, making it the largest offshore wind farm development in the world,” said Sætre.
“In addition, we won the opportunity to develop Empire Wind offshore New York, delivered development plans for [the floating wind development] Hywind Tampen and realised significant value from the farm-down in the Arkona wind farm offshore Germany.”
The Norwegian company last month together with its partner SSE was awarded a 15-year Contract for Difference for the 3.6GW Dogger Bank offshore wind project in the North Sea, the world’s largest so far.
The massive scale of the project, jointly with the winning of the up-to-1.5GW Empire Wind project off the US North-East coast, has put Equinor even more firmly on the map of the world’s most important offshore wind developers.
With the go-ahead for the relatively small 88MW Hywind Tampen floating project, Equinor also has entered the potentially very large market for offshore wind projects built to power oil and gas operations.
At the same time, Equinor recently gained $556m with its sale of a 25% in the 385MW Arkona offshore wind farm in the German Baltic Sea, showing how valuable stakes in offshore wind farms have become.
While giant projects such as Dogger Bank in the beginning mostly mean very high investment costs, Equinor clearly is betting on future profits from offshore wind to make up for potentially falling earnings in its traditional oil and gas business.
For the time being, however, Equinor’s offshore wind business is still so tiny when compared to its massive global oil and gas operations that the company isn’t even mentioning it as part of its earnings, profit or investments.
Equinor during the third quarter of 2019 had a $1.1bn net loss, compared to a $1.67bn net profit in the same quarter a year earlier, following net impairments of $2.79bn mainly due to more cautious price assumptions.