DONG Targets 12GW of Installed Offshore Wind by 2025

DONG Energy yesterday revealed its ambition to increase the installed offshore wind capacity to 11-12GW at the end of 2025.

At the end of 2016, the company had a total of 3.6GW of installed offshore wind capacity. “We are the company that has constructed the most offshore wind turbines globally. We have constructed more than a quarter of the world’s total offshore wind capacity. In 2016, we reached the milestone of offshore wind turbine no. 1,000,” DONG Energy stated.

Regarding the 2020 target of 6.5GW, which DONG Energy set in 2013, the company said it will be exceed by 200MW after the completion of the 1.2GW Hornsea Project One offshore wind farm in the UK. “In the period leading up to 2020, we will build almost as much offshore wind capacity as in the preceding 25 years combined,” the offshore wind giant said in its 2016 financial report.

In the post-2020 period, the licences for the Dutch projects Borssele 1 & 2 represent the first 0.7GW of capacity to be fully commissioned. With the development consent for Hornsea Project Two, DONG Energy said it is well-positioned to bid at future auctions in the UK, the first of which is expected to be held in the second quarter of 2017.

Furthermore, the company said it has a portfolio of several German development projects with a total capacity of more than 1GW, which are all possible candidates for German auctions, with the first one scheduled to take place in April 2017.

DONG Energy also has an offshore wind portfolio outside Europe.

In February, the company secured the rights to its second North American project, the Ocean Wind development project off the coast of New Jersey with a potential capacity in excess of 1GW. At the end of the year, the company entered into a strategic partnership with Eversource Energy to jointly develop the Bay State Wind project in Massachusetts, which could also acommodate more than 1GW of offshore wind. With Ocean Wind and Bay State Wind, which have a total potential of more than 2GW, DONG Energy could become one of the largest project developers of offshore wind in the USA.

Last year, the company also progressed the main part of the environmental impact assessments (EIAs) of four offshore wind farm projects in the Changhua region in Taiwan. Subject to approval of the EIAs by the Taiwanese authorities, DONG will develop these projects with a total offshore wind capacity of up to 2GW by 2025.

Moreover, in January, the company concluded an agreement to acquire a 35% ownership share in the Taiwanese offshore wind farm project Formosa 1, which has been developed by the Taiwanese company Swancor Renewables. Formosa 1, Taiwan’s first commercial offshore wind farm project, consists of two phases. The first phase with an 8MW capacity was completed in October 2016. The second phase is expected to have a capacity of 120MW and will be ready for installation in 2019, subject to a final investment decision being made.

“Our ambition for the period leading up to the end of 2025 is to expand our installed capacity to 11-12 GW with increased focus on relatively complex projects in strategic markets such as the UK, Germany, the USA and Taiwan, where developers are to deliver the full scope of the projects. Our integrated business model and in-depth technical expertise provide a good basis for maintaining our position as market leader within offshore wind while at the same time retaining a sound risk and return profile,” said Samuel Leupold, CEO of DONG Energy’s Wind Power business.

DONG Energy’s business currently consists of 80% activities in offshore wind, 12% in power and gas distribution and sale, 4% in bioenergy and thermal power, and 4% in oil and gas.

The company reported a net profit of approx. EUR 1.6 billion for 2016 – some EUR 1.5 billion more than in 2015, when the net profit amounted to approx. EUR 134 million.

In November 2016, DONG Energy announced it had decided to exit from its oil and gas business and in January the company revealed it expects to divest its activities within exploration and production of oil and gas before the end of this year.

In addition, the company decided to entirely phase out the use of coal as fuel at its power stations by 2023. Given the continuous coal consumption reduction and the development of offshore wind power, DONG Energy will have gone from being one of the most coal-intensive utilities in Europe to being among the greenest energy companies in Europe in just one decade, the offshore wind giant said.

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