DONG Energy's Burbo Bank Extension offshore wind farm project remains on track having met a key contractual milestone.
The project has successfully demonstrated that 10 per cent of total project expenditure has now been spent, a fundamental contractual requirement which had to be met for the milestone to be delivered. This is one of the requirements the project must achieve to qualify for its investment contracts. Burbo Bank Extension was one of five UK offshore wind farms awarded an early contract CFD in April 2014 under the Government's Final Investment Decision (FID) Enabling for Renewables process.
The CFD will guarantee that the projects will receive a fixed price per megawatt hour of electricity produced during its first 15 years of operation. The CFD is the new mechanism developed by Government for funding low carbon generation. After this the wind farm will receive the prevailing market price. Burbo Bank Extension is the first project in the UK to comply with the CFD milestone.
Expected to be commissioned in 2017, the 258 megawatt wind farm in Liverpool Bay will be able to supply the electricity needs of around 180,000 UK homes. Having received development consent in September last year, the wind farm will consist of 32 MHI Vestas Offshore Wind 8 MW wind turbines.
Klaus Skoust Møller, DONG Energy' s senior programme director for Burbo Bank Extension said:
"I am delighted that we have achieved this milestone. Getting the submission together was a real team effort with over 300 documents produced to ensure we met the requirements of the Government's CFD delivery body, the Low Carbon Contracts Company, who helped us by maintaining an open dialogue throughout the process."
He added: "The milestone is a significant achievement for the project which demonstrates our commitment to deliver Burbo Bank Extension to time and cost. It also confirms DONG Energy wider commitment to offshore wind in the UK. We have already placed a number of important contracts and the pace of the project is increasing month on month. Work has been ongoing for some time now onshore in St. Asaph and this is progressing well.
"The Burbo Bank Extension will be using the world's largest available offshore wind turbines and, when commissioned, the wind farm will represent another significant step towards reducing cost of electricity on future projects."
Some of the contracts with UK content awarded by the Burbo Bank Extension project to date include:
- A turbine supply agreement with MHI Vestas – blades will be produced on Isle of Wight
- A foundation supply agreement with EEW – half of the transition pieces will be produced at the UK facility of Offshore Structures (Britain) Limited in Teeside
- Offshore Substation with JVFI – design is undertaken in the UK by Atkins
- Onshore substation construction and enabling work with Balfour Beatty and Jones Brothers both UK based companies
About DONG Energy:
DONG Energy is one of the leading energy groups in Northern Europe. Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe. Headquartered in Denmark, DONG Energy has around 6,500 employees, including 600 in the UK. The Group generated DKK 67 billion (EUR 9.0 billion) in revenue in 2014. For further information, see www.dongenergy.co.uk
About the Low Carbon Contracts Company
The Low Carbon Contracts Company has been established by DECC to implement key elements of the Government's Electricity Market Reform programme. As part of this it is managing Investment Contracts and CFDs worth tens of billions of pounds encompassing a variety of low carbon technologies. For more information, see www.lowcarboncontracts.uk
For further information contact:
Alan Price +44 (0)207 811 5208
James Platt +44 (0)207 811 5519
Brad Watson +44 (0)207 811 5419