Vattenfall will bid to build new offshore wind farms in Europe this year as it moves towards carbon-free generation and ditches brown coal, a senior official at the Swedish power utility told Reuters.
The company plans to boost its wind power portfolio in Europe by 400 to 600 megawatts (MW) per year over the next five years from the current installed 2 gigawatts (GW), possibly spending around €5.5bn ($6bn).
Vattenfall’s state owner wants it to turn entirely green, which has meant selling off brown coal mines and generation in Germany and shifting to wind power.
The group currently has a wide range of nuclear, coal-fired, hydroelectric and wind assets in its existing generation mix, with nuclear is also under political and market pressure in a low price environment.
“The transformation to low-carbon generation is our declared goal. Wind is showing us the way,” Gunnar Groebler, Vattenfall’s executive group management member in charge of wind, said on the sidelines of the E-World trade fair.
Vattenfall will compete in four Dutch wind turbine tenders called Borssele 1 to 4, as well as in near shore projects such as Kriegers Flak in Denmark, where it has pre-qualification status, Groebler, who took on his role in April last year, said.
“We think we stand reasonable chances, but there are between 10 and 12 competitors in each round and only one can win,” he said.
Vattenfall’s major competitors for such assets include Denmark’s Dong and Germany’s E.ON.
To help finance the wind projects and free up capital, Vattenfall is seeking partnerships where its experience should offer investors a good return, Groebler said.
The asset class had already matured to a degree, prompting investors to line up, he added. Swedish pension fund AMF bought a 49% stake in Vattenfall’s Ormonde project in Britain in December.
“We have now over 1,000 turbines in operation and the necessary experience in the construction and operation of wind parks... that we can use to optimise maintenance, among other uses. That brings cost advantages,” Groebler said.
More cost cutting is expected in offshore wind as governments seek to curb subsidies and move to market-based models to reward producers.
Vattenfall last year won a tender to build the 400 MW Horns Rev 3 wind park off Denmark at a cost well below German prices, for which a final investment decision will probably be made this summer, Groebler said.
Vattenfall would further develop two UK wind park projects, East Anglia and Aberdeen Bay this year, while further afield, Sweden, France, Poland and Norway could become target markets.