MHI Vestas Offshore Supply Contract May Be $2.5 Billion

Updated on

MHI Vestas Offshore Wind A/S was picked as the preferred supplier for a wind project off the U.K. for as much as 970 megawatts of turbines with a contract that may be worth up to an estimated 1.6 billion pounds ($2.5 billion).

MHI Vestas will disclose further details “as soon as the project translates into a firm and unconditional order,” the venture by Aarhus, Denmark-based Vestas Wind Systems A/S and Mitsubishi Heavy Industries Ltd. in Tokyo said on its website.

The order would mean as many as 121 of the company’s 8-megawatt turbines, according to MHI Vestas. The proposed Navitus Bay project is off Dorset and Hampshire and west of the Isle of Wight, where MHI Vestas has a blade-production facility, according to the website.

The offshore project is being developed by a venture between Eneco Wind UK Ltd. and EDF Energy Renewables, according to the website for the development. The application for the project being considered by authorities could power as many as 700,000 homes when completed by 2021.

Earlier this week, MHI Vestas said it received an order for 400 megawatts of turbines for the Rampion project off Sussex.

Based on the pound per megawatt figures disclosed for Rampion this week, the Navitus Bay project could cost about 3 billion pounds for the full 970 megawatts or 2 billion pounds for the 630-megawatt option, according to “very rough estimates” from Bloomberg New Energy Finance analysis.

That means the turbine contract itself may be worth about 1.6 billion pounds for 970 megawatts or 1.1 billion pounds for 630 megawatts, BNEF estimated.

The MHI Vestas Offshore Wind venture began in April 2014. It received the first order for its V164-8 MW turbine from Dong Energy’s Burbo Bank Extension project in Liverpool Bay in the U.K. in December.

The Navitus Bay project office cannot comment on the total cost or the turbine cost at this stage, according to a press office official who declined to be named.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE