25 Mar 2020
EUR 750 million
DONG Energy is building Denmark's largest offshore wind farm. NIB is financing the project with a EUR 240 million loan.
With an overall capacity of 400 MW, the new Anholt wind farm will cover 4% of Denmark's total power consumption and contribute to Denmark meeting its objective of ensuring that the percentage of renewable energy reaches 30% of total energy consumption by 2020.
"For a small country like Denmark, a 400 MW offshore project covering 4% of the power consumption is a vital contribution. The experiences gained from the Anholt project contribute to the development of the global offshore wind industry," says Flemming Thomsen, project director of the Anholt Offshore Wind Farm.
Several factors have to be considered when building a large-scale wind farm in the Kattegat Sea.
"Wind turbines are placed to get maximum wind exposure, but at Anholt we face more challenging soil conditions than normal. Some areas within the wind farm area are dominated by formations of soft clay reaching deep down in the sea bottom, while in other areas we are facing a large number of big stones."
"Installation work offshore always includes high costs and the risk of additional costs due to delays which could affect the tight schedule the project is facing," Mr Thomsen explains, adding that the Anholt wind farm will produce its first power by the end of 2012. The complete wind farm will be in operation by the end of 2013.
Large scale, long term
Big energy projects require long-term financing and NIB is contributing to the project with its single largest loan ever.
"We are very pleased with our long-standing relationship with NIB as one of our main lenders. The relationship is based on a common understanding of the direction in which DONG Energy is moving. Many of our infrastructure and renewable power projects are aligned with NIB's mandate, namely, to support investments that enhance the environment. The strong relation with NIB provides access to attractive financing for our environmental projects," Mr Thomsen says.
The implementation and development of renewable energy systems is a focus area for NIB and the Bank has previously financed DONG Energy's projects. In 2008, NIB provided a EUR 160 million loan for the Horns Rev II wind park and Horns Rev I received a EUR 40 million loan from NIB.
"Generally, DONG Energy has had good access to financing during the current economic downturn. However, raising specific financing for large offshore wind projects is in general cumbersome due to the scale of the projects and the fact that it is a new industry. The appetite and capacity of the financial institutions to provide financing for these types of projects have been affected to some extend by the financial crisis, and we are pleased that NIB made available financing for our Anholt Offshore Wind project," Mr Thomsen says.
According to him, reliance to subsidies is one of the current challenges in the wind energy market.
"Offshore wind still needs subsidies, especially when one considers the current market price of power. It is vital to reduce the cost of energy from offshore wind. We are dedicated to the industrialisation of the industry, where optimisations through large-scale contracts and a focus on technological development are the priorities," Flemming Thomsen concludes.