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In the first of two German auction rounds, the Bundesnetzagentur has awarded DONG Energy the right to build three offshore wind projects in the German North Sea.

DONG Energy submitted six projects in the bid and won with the following three projects which have a total capacity of 590MW:

  • OWP West (240MW)
  • Borkum Riffgrund West 2 (240MW)
  • Gode Wind 3 (110MW)

The three projects are planned to be commissioned in 2024, subject to Final Investment Decision by DONG Energy in 2021. For two of the projects – OWP West and Borkum Riffgrund West 2 – DONG Energy made bids at zero € per MWh, i.e. these projects will not receive a subsidy on top of the wholesale electricity price. The Gode Wind 3 project was awarded based on a bid price of € 60 per MWh. DONG Energy will be responsible for the turbines, array cables and offshore substation, while grid operator TenneT will be responsible for construction, operation and ownership of the onshore substation and the export cable. Cost-drivers enabling the zero subsidy bid are:

  • Significantly bigger turbines – probably 13-15MW
  • OWP West and Borkum Riffgrund West 2 will be combined into one large-scale project with the option of adding additional volume in next year’s auction to further increase the total size of the project.
  • The projects benefit from average wind speeds of more than 10 m/s. Also, the projects are located next to DONG Energy’s Borkum Riffgrund 1&2 which means that operations and maintenance can be done from DONG Energy’s existing O&M hub in Norddeich.
  • The German authorities have approved the possibility to extend the operational lifetime of the asset from 25 to 30 years.
  • Developers were not bidding for the grid connection in the German auction, which means that grid connection is not included in the bid price.

The above drivers deliver a cost-of-electricity below Dong’s forecasted wholesale power price