Site work starts in Baltic Sea strait -- Vattenfall picks Siemens

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Vattenfall, one of Europe's largest utilities, is scheduled to break ground on the 110 MW Lillgrund offshore wind farm this month. The project, in sheltered waters in the Baltic Sea strait between southern Sweden and Denmark, is located seven kilometres south of the Øresund bridge connecting the two countries. It is to go on line in late 2007.

Siemens is to supply the 48, 2.3 MW wind turbines. They have a proven track record offshore at Denmark's nearby 160 MW Rødsand facility off the town of Nysted, southern Denmark, says Anders Dahl, head of Vattenfall's wind operations. "Basically to a large extent these are the next generation of the turbines at Nysted," Dahl says. From Siemens, spokesman Martin Olesen says the company has over 100 turbines installed at offshore wind plants, and the Mk II 2.3 MW destined for Lillgrund will be made at the company's Brande plant in central Jutland, Denmark.

Vattenfall plans to begin dredging this month and lay its first turbine foundations in May. Site construction work will be done by Germany's Hochtief Construction and its Danish partner E.Pihl & Son. Neither Siemens nor Vattenfall will disclose the exact value of the entire project. Hochtief's contract alone is confirmed at EUR 33 million, while Swiss-Swedish consortium ABB has a EUR 13.3 million contract with Vattenfall to install Lillgrund's power cables.

Price shock

Dahl says Vattenfall found Siemens a leader in total project profitability, though the company experienced a certain sticker shock with all the incoming bids. "We were both surprised and shocked when we saw the high prices," he says. The loss of the planned Scandinavian market for trade of green energy certificates (page 48) is also cause for slight concern. "The market gets smaller, the risk gets higher and price volatility is more of a concern," says Dahl.

Lillgrund is expected to generate enough electricity for around 60,000 Swedish households, a fact Dahl says is continually emphasised in Vattenfall's outreach efforts to onshore communities near the development. Though construction will soon get underway, Lillgrund is still being appealed by local parties who have lodged their opposition to the project. Dahl says one objection in the latest appeal is Vattenfall's new specification to install wind turbines with a height of 115 metres instead of the 105 metres originally planned. The company raised turbine height to pull in more vendors to the bidding process to possibly increase Lillgrund's energy yields and ultimately, project profitability.

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