Photographer: Simon Dawson/Bloomberg

Hinkley Options Emerge With Dong Able to Speed Offshore Wind

  • Increasing volumes is key to curbing costs of renewables
  • Dutch wind farm will supply power below 100 euros per Mwh

Dong Energy A/S is ready to offer the U.K. more offshore wind power should Prime Minister Theresa May scrap construction of a nuclear plant.

“We would further be able to further accelerate and expand the build out of offshore wind should there be such a need,” Dong’s Chief Executive Officer Henrik Poulsen said Thursday in a phone call with reporters. “Of course, that’s entirely leaving those decisions to the U.K. government.”

The U.K. government last week said it’s reviewing the 18 billion pound ($24 billion) Hinkley Point plant, which will be subsidized at 92.50 pounds a megawatt hour, or twice the current market price of power. Developer Electricite de France approved its final invest decision in the two new reactors last week. Some energy analysts say offshore wind electricity could be an economically-viable alternative to nuclear.

“If the Brits cancel Hinkley and need more offshore wind power it’ll certainly be something we can help with,” said Poulsen in a separate phone interview Thursday. “We just want to make the point that if they want to accelerate the build-out of offshore wind energy we’re at their disposal.”

Building more offshore wind farms is key to driving down the cost of the renewable energy technology, according to Poulsen. The Danish utility, which is the world’s biggest offshore-wind-farm developer, sold shares to the public in June. The company reported Thursday that after-tax profit doubled in the first half.

Offshore wind is currently one of the most expensive forms of low-carbon energy, though the industry says its aggressively trying to reduce costs. Dong last month won a contract to develop two wind farms in the Netherlands expected for the first time to deliver power below a 100 euros ($111) per megawatt hour target, Poulsen said.

“We have certainly made more progress faster in terms of reducing the cost of offshore wind than we dared to expect when we met the target four years ago,” the CEO said. “Over the past two to three years in particular we’ve seen tremendous progress in bringing down the cost of offshore wind.”

Poulsen wouldn’t say if Dong will bid in the U.K.’s next auction later this year, offering contracts for low carbon-emitting power generation. The government is expected to decide this month whether to give planning permission for its Hornsea Project Two offshore wind farm, he said. That project could have a capacity of as much as 1.8 gigawatts and will be located off the east coast of England.

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