Dong Energy Spearheads Offshore Wind Cost-Cutting Drive

Dong Energy A/S, Denmark’s state-controlled utility, is leading a drive to cut offshore wind-power costs by as much as 40 percent by the end of the decade.

Dong is working with six other companies and three British and Irish universities to study ways of using less steel in wind-turbine foundations at sea to make the technology more affordable, it said today in an e-mailed statement.

“The cost of energy from offshore wind turbines must be reduced,” Bent Christensen, a vice president at Dong’s wind division, said in the statement. “We expect to find significant savings” by cutting the size of foundations and changing the way turbines are installed, he said.

Offshore wind power costs about 2.7 times more than onshore turbines, according to Bloomberg New Energy Finance, which puts the cost at about $221 a megawatt-hour over the life of a project. Governments are seeking to reduce the expense of wind farms at sea to expand power supplies without adding to carbon emissions or building on land.

Dong is targeting a price of 100 euros ($134) by 2020, lower than the U.K. government’s goal of 100 pounds ($155).

Dong, RWE AG (RWE), Statoil ASA (STL), Statkraft AS, SSE Plc (SSE), Iberdrola SA (IBE)’s Scottish Power division and Vattenfall AB have enlisted researchers at the University of Oxford, University College Dublin and Imperial College London to help with the research.

The project is slated to last 18 months, with results published in early 2015, Dong said. That should enable the findings to be applied to the offshore wind projects that won licenses in the third round of U.K. tenders, it said.

The 600-metric-ton weight of a typical offshore turbine foundation represents a “substantial” cost, Dong said. “A significant contribution can come from this area towards our efforts of reducing the price of offshore wind power by 35 to 40 percent by 2020,” Christensen said.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net

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

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