DONG inaugurates Denmark’s largest offshore wind farm

With a gentle afternoon breeze to accompany proceedings, Anholt, Denmark’s largest offshore wind farm, was inaugurated on 4 September by Queen Margrethe onboard the ferry Stena Nautica. The Anholt Offshore Wind Farm is co-financed by the Nordic Investment Bank. The farm is located about 20 kilometres off Denmark’s eastern coast between Grenaa Harbour and the island of Anholt. It exemplifies the ongoing innovation and potential that offshore wind power offers.

The 400 MW Anholt Offshore Wind Farm consists of 111 turbines, each with a capacity of 3.6 MW and a rotor diameter of 120 meters. Together, they cover 4% of Denmark’s total power consumption. The power produced at Anholt is the result of a political decision on a national offshore wind farm action plan adopted in 2008.

The wind farm has been operational since June and is a significant contributor to Denmark’s ambition of meeting one half of the Nordic country’s demand for electricity from wind by 2020. Wind power already accounts for almost one third of the nation’s electricity consumption. In comparison, the International Energy Agency forecasts the global share of renewable sources in power generation will increase from 3% in 2009 to 15% in 2035.

Denmark’s Prime Minister Helle Thorning-Schmidt said DONG Energy has an important role to play in realising the government’s green targets.

“Denmark’s wind mill saga is ambitious and exceptional globally. But as we see here today, it is a realistic ambition,” said Thorning-Schmidt.

DONG Energy A/S, in which the Danish State holds an 81% share, was awarded the public tender to build the farm in 2011. The company has developed and constructed more offshore wind farms than any other company in the world. Construction took two winters and one summer and involved more than 3,000 people working on-site.

This has created new business opportunities for locals in the town of Grenaa and elsewhere in Jutland, and some will continue as DONG Energy was also awarded the license to operate the offshore farm with a 70-strong crew for the next 25 years.

For Dane Jannick Thru (24) it has meant an opportunity to sustain his own taxi service. While enjoying the benefits of the heightened economic activity in the area, he says few can blame locals for a certain distaste towards the tall and sometimes noisy land-based wind mills in Jutland.

“Still, it’s a bit funny that people now actually travel from far away in order to see the Anholt wind mills out in the sea,” Thru says.

These so-called “mill trips”, arranged on Saturdays by the ferry company Stena Line and DONG Energy, have proven to be very popular with hundreds of participants for each departure.

The farm is co-financed by NIB with a 10-year EUR 240 million loan, of which 38% is raised through the NIB Environmental Bond fixed-income issuance. The 10-year-maturity loan, which represents NIB’s largest single loan ever, has financed 36% of DONG Energy’s total costs of DKK 5 billion. Financing renewable energy is a priority for NIB and the Bank has also previously financed DONG Energy’s projects Horns Rev 1 and 2.

“NIB’s loan to DONG Energy’s Anholt project contributes to making Denmark less dependent on fossil fuels, and that is something that fits very well into our thinking,” says Ann Værum, Senior Manager of energy and environment origination.

The 400 MW Anholt Offshore Wind Farm is only dwarfed by the world’s largest offshore installation, the 630 MW London Array in the UK—which in fact was built by DONG Energy—that was inaugurated in July. With the completion of these two wind farms, DONG has installed a total of 2 GW offshore wind power capacity. The company targets installation of a total capacity of 6.5 GW offshore wind by 2020.

Vice President of Group Treasury and Investor Relations of DONG Energy, Allan Bodkov Andersen, says the company has a clear target to significantly bring down the cost of energy from offshore wind power projects towards 2020.

“This will be possible as turbines become larger and more efficient, and as projects are constructed and operated with improved logistics as a result of a growing number of offshore wind farms,” Andersen says.

The Danish government currently has two ongoing tenders for the construction and maintenance of two offshore wind farms, the 400 MW Horns Rev 3 planned next to the existing Horns Rev 1 and 2 in the North Sea west of Denmark, and the 600 MW Kriegers Flak east of Denmark in the Baltic Sea. The deadlines for tenders are November 2013 and April 2014, respectively.