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Wind farm contract

November 18, 2013

German conglomerate Siemens has struck a multi-million euro deal with Denmark’s Dong Energy for the construction of a major wind farm off the German coast. The contract is for the biggest turbine models ever installed.

Image: picture-alliance/dpa

Denmark's Dong Energy had ordered 97 wind turbines from Siemens Wind Power, which were to be installed in the firm's new North Sea wind farms Gode Wind 1 and 2, the German engineering conglomerate announced Monday.

The contract was for Siemens' new 6-megawatt (MW) turbines, which had a rotor diameter of 154 meters (168 yards), and included full 5-year services for the installations, Siemens said.

Neither Siemens nor Dong disclosed the total value of the contract, but sources close to the negotiations told Reuters news agency that it amounted to about 1 billion euros ($1.33 billion).

The two Gode Wind projects off the German coast are Dong's biggest investment ever, generating a total of 582 MW - the annual electricity consumption of about 600,000 German households.

“Being constructed in an area with good wind and soil conditions, relatively close to shore and in a cluster where we can harvest synergies, the Gode Wind projects provide a sound business case,” said Dong's Vice President Samuel Leipold on the company website.

Major offshore wind farm projects in German territorial waters have become rare in recent months due to unresolved technical difficulties and uncertainty about future German government subsidies for wind energy.

Dong said it would receive a fixed price per kilowatt hour of electricity produced for the first ten years of operation after which it would have to sell its electricity at market price.

The Danish firm also called on the government to unveil a support framework for wind energy in the future, which was needed to attract private capital for investments in modernizing Germany's energy sector.

Berlin is currently weighing options for reducing its subsidies for renewable forms of energies, as a boom in green energy has led to sharp spikes in German electricity prices.

uhe/hc (dpa, Reuters)