Power purchase agreement bolsters offshore wind sector as Manchester crane supplier secures multi-million Gwynt y Môr contract
The UK's offshore wind industry has taken a major step forward after two of Europe's leading energy firms agreed a £160m power purchase deal for energy generated by four offshore wind farms.
Norwegian utility Statkraft announced earlier this week that it has signed a two-year deal to buy 50 per cent of the energy produced by Dong Energy's Burbo Bank, Gunfleet Sands, Walney and London Array UK offshore wind farms.With an initial installed capacity of 127MW, growing to 545MW once the London Array is finished, Dong is expected to supply 2.7TWh of renewable electricity during the contract period, equating to about £160m worth of energy based on projected UK electricity prices.
The contract, based on a variable spot price, started at midnight on 3 April and is being managed by Statkraft's UK Short Term Energy Management team in Dusseldorf, Germany.
Henrik Valgma, Dong Energy's senior vice president of portfolio management and trading, said that Statkraft will be an important and reliable partner for the company's renewable energy projects.
"The negotiations has been hard, but performed in a constructive and respectful way," he said. "This atmosphere, for sure, paves the way for more future co-operation."
In other news, RWE npower renewables confirmed yesterday that it has signed a "multi-million pound" contract with Manchester-based Granada Handling Material to manufacture 164 crane units for its 576MW Gwynt y Môr Offshore wind farm off the North Wales coast.
The deal was a direct result of RWE and Granada meeting at one of the Crown Estate's supply chain events, which have been designed to provide a marketplace for offshore wind farm developers to secure supply chain contracts.
The contract secures work and income for two years for the Rochdale business, which is now looking to place orders and sub-contract specialist areas of work to other firms in North Wales.
It will also enable redevelopment of Granada's workshop, and provide financial security to expand its workforce.
RWE plans to fit one of Granada's crane units to each of the 160 transition pieces at the base of the wind turbines as well as the offshore substations.
Gwynt y Môr project manager Toby Edmonds said that RWE was pleased to have awarded a contract to a UK supplier.
"Particularly significant is that Granada has invested a lot of time and effort into meeting with the industry at trade shows and other events to understand what is needed, and then apply this knowledge to position their business," he said.
"As a result, their product is right for our project and they put together a very strong proposal that was pitched in just the right way to compete successfully against strong competition."