Dong departs and makes new entry

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Denmark's Dong Energy, currently involved in seven offshore wind projects either under construction or on the way in northern Europe, is pulling out of its involvement in the second of two offshore wind farm extensions sponsored by the Danish government. Its 80% share in Rødsand II in the Baltic Sea just off the southern coast of Denmark near Nysted is being taken over by its partner, the Swedish division of German utility E.ON.

Dong's Niels Bergh Hansen cites the risk involved in the rising price of turbines for the company's decision to drop its least profitable offshore investment. Dong was selected by the Danish government for a power purchase contract based on its bid price of EUR 0.067/kWh for about 12 years of operation. The 2000 MW project, which will extend the existing 168 MW wind plant at Rødsand, is due for completion in 2010, although Dong had been planning to commission turbines in 2008.

The Danish government is also sponsoring a 200 MW extension to the Horns Rev wind farm in the Danish North Sea, also being built by Dong through its ownership of Energi E2. The contract price agreed for Horns Rev II is EUR 0.07/kWh. At an estimated cost of EUR 470 million each, the two wind farm extensions are double the price of wind plant built on land.

Meanwhile, Dong has increased its offshore interests in the UK by acquiring the 240 MW Westernmost Rough site in the Greater Wash, east England. The Danish company was awarded the lease granting site development rights after a tendering process by The Crown Estate, owner of the seabed around the UK. The site was originally granted to Total Energie of France, but handed back in February when the company decided not to pursue offshore wind in the UK.

Westernmost Rough is one of the larger offshore projects being developed under Britain's second round sites of offshore development. Located off Humberside, it is the most northerly of the sites in the Greater Wash. Rob Hastings from The Crown Estate says: "We were very encouraged by the interest that we received for Westermost Rough, resulting in a highly competitive tender process with very strong contenders. The site was awarded to Dong Energy based on their clear and unconditional commitment to progress the development of the site."

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