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Dong Halts Work on German Offshore Wind Farm on Grid-Link Delay

Dong Energy A/S suspended work on a North Sea wind farm because the company lacked a deal on connecting it to the grid, adding to pressure on Germany to end delays in linking offshore turbines to the power system.

“Due to the lack of the contract for the grid connection for the Borkum Riffgrund II project being awarded, we have been forced to suspend the development and construction,” Christoph Mertens, director of Dong Energy Wind Power in Germany, said today in an e-mailed statement. Dong will place the project back into the company’s “development pipeline,” Mertens said.

Siemens AG (SIE), which had a deal to supply turbines, has seen “no effect as we haven’t yet booked the order,” said Eva-Maria Baumann, a Siemens spokeswoman. The farm in waters off Emden was expected to use about 96 turbines generating as much as 346 megawatts, according to Dong’s website. Dong canceled an order for 97 Siemens turbines, Der Spiegel reported yesterday.

The suspension is a setback to Germany’s plan to install 25 gigawatts of sea-based turbines by 2030 as work is being held up by delays in linking farms to the grid. RWE AG (RWE), the country’s second-biggest utility, said in July it stalled a decision on building the Innogy Nordsee 1 offshore site until next year as it waits for the government to set out who will pay for delays.

Germany added 45 megawatts of offshore wind turbines in the first half, less than expected, mainly because of the holdups.

Lawmakers from the main political parties today questioned experts over a bill backed by Chancellor Angela Merkel’s Cabinet of Ministers that seeks to fix the liability issue. It includes charging operators and consumers for installation risks.

The bill as it stands “would fail to attract investors because the risk is too high and can’t be insured,” Ulrike Hoerchens, a spokeswoman for TenneT, responsible for connecting North Sea offshore farms to the grid, said today by phone.

“We’ve called for tenders and haven’t received acceptable offers,” Hoerchens said. Possible contractors declined to give delivery dates “because of the uncertainty due to the missing liability rules,” she said. Dong’s Borkum Riffgrund II farm was due to be linked to the Dolwin3 converter station, she said.

To contact the reporter responsible for this story: Sally Bakewell in London at Sbakewell1@bloomberg.net and Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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