DONG Energy has been given the go-ahead by parliament to build a wind park off the island of Anholt that will have the capacity to supply 400,000 households with eco-friendly power.
At the same time, a new cable will allow inhabitants of Anholt to begin using renewable energy.
A near unanimous parliament has decided to accept the tender from DONG Energy to build and operate Anholt Offshore Wind Park (Anholt Havmøllepark).
Based on the Anholt tender, Minister for Climate and Energy Lykke Friis has agreed with the political parties supporting the current energy policy to initiate an analysis of future models for the construction of offshore wind parks. The goal of the study will be to lay the foundation for future investment and ensure the lowest possible costs for electricity consumers.
The 400 MW offshore wind park will be Denmark’s biggest offshore wind park and upon completion in 2012-13 will supply eco-friendly electricity on a scale equivalent to the yearly consumption of 400,000 households. At the same time, the project is estimated to boost employment, with up to 8,000 individuals participating during the construction period. Additionally, Denmark will move one percentage point closer to the goal of 30 percent renewable energy by 2020.
“With this decision, we have taken yet another big step in reorganising our energy supply in the direction of renewable energy, which will benefit both the climate and national energy security. At the same time, the decision helps us to sustain the strong position we have established in the area of building and operating offshore wind parks,” says Friis.
The tender from DONG Energy, the only bidder for the project, is for 1.051 DKK/kWh for approximately half of the wind park’s lifespan. During the other half, the electricity generated will be sold at market conditions and without subsidy. The price is higher than the settlement price for Rødsand II, which is currently under construction, but on par with the price for similar offshore wind parks in our neighbouring countries.
Given the higher price, parliament requested accountancy firm Ernest & Young to perform an independent assessment of the tender. It concluded that DONG Energy’s bidding price is reasonable given the current market conditions and the conditions of the tender. The price increase is primarily the result of a substantial capacity expansion currently taking place in other countries. Rising costs in connection with purchasing and installation of the wind park have led to increased overall construction costs.
“I would definitely have liked to see more bids and a lower bidding price. But with the current competitive situation we have the best possible bid,” says Friis, and underscores that not investing in renewable energy is simply unrealistic:
“Renewable energy is not free. But when you look at the price you need to remember that the alternative – doing nothing – is not an option. An increasing global population means a greater need for energy and with it a higher price of oil and gas, and because we are only a few years away from not being self-sufficient in oil and gas, we will become completely dependent on the relatively few nations that have oil and gas, if we do not manage to build up our own energy supply.”
Seen in terms of its projected 25-year lifespan, Anholt Offshore Wind Park will end up being a good deal for the consumer. On average, the annual subsidy will amount to 0.01 DKK/kWh, which corresponds to DKK 44 per year for an average household (4,000 kWh/year). But this is counterbalanced by expectations that electricity production from the offshore wind park will have a moderating impact on electricity prices of at least the same scale.
The Minister for Climate and Energy will also ask Energinet.dk to connect the wind park to Anholt by undersea cable, linking the island to the national power grid. The cable will give the island’s 140 inhabitants the possibility of replacing the diesel generators they currently use with eco-friendly electricity. This is in accordance with the national energy policy’s general aim of independence from fossil fuels. Furthermore, the project will contribute to improving the local environment.
Additionally, the Minister for Climate and Energy has asked the Offshore Wind Park Committee to update the 2008 Offshore Wind Park Action Plan in order to determine where new offshore wind parks could be built. The committee has just finished reviewing locations near the island of Læsø and Kriegers Flak, and recommends Kriegers Flak as the site of the next large-scale offshore wind park. The Government will, however, wait for the result of the analysis on future tender models in order to provide the political parties supporting the 2008 energy policy agreement with a comprehensive basis for taking a position on new construction.
The settlement parties – the Liberal Party, the Conservative People’s Party, the Social Democrats, the Danish People’s Party, the Socialist People’s Party, the Social-Liberal Party, Liberal Alliance and the Christian Democratic Party – have agreed to vote in favour of appropriating funding for the Anholt Offshore Wind Park when a vote on amending the Renewable Energy Act comes up during the next parliamentary session in the Danish Folketing.
Contact:
Press Secretary Jesper Bülow Zølck, Ministry of Climate and Energy, tel: (+45) 50 87 48 81, e-mail:
jebzo@kemin.dkHead of Media Ture Falbe-Hansen, Danish Energy Agency, tel: (+45) 3392 6856, mobile: (+45) 25 13 78 46, e-mail:
tfh@ens.dk, or
Deputy Director General Anne Højer Simonsen, Danish Energy Agency, tel: (+45) 3392 5566, e-mail:
ahs@ens.dk