COPENHAGEN- Germany's RWE on Wednesday won a tender to build what will be Denmark's largest wind farm, The Danish Energy Agency said, adding that this will be the world's first offshore wind farm constructed with actual payments to the state.
The winner was drawn by lottery after several bids were made at a minimum price and the deal comes as a blow toDenmark's Orsted, the world's biggest developer of offshore wind, which had also put in a bid.
The tender underlines the fierce competition for renewable investments in mature markets where costs have been driven down to levels where it can compete with fossil fuels making it possible to phase out subsidies for some projects.
RWE will pay the Danish state for the first years of the wind farm's production until it reaches a 2.8 billion Danish crowns ($426.48 million) cap, which is expected within a few years.
"It is the world's first offshore wind farm constructed with payments to the state," the energy agency said in a statement.
The Thor wind farm, which will deliver 1 gigawatt (GW) of renewable electricity, is one of three large offshore wind farms Denmark aims to have built before 2030 as part of its plans to reduce its carbon emissions to 70% below its 1990 levels by 2030.
Thor is expected to start producing electricity from around 2026 and total investment costs are estimated at 15.5 billion Danish crowns ($2.36 billion).
The head of Siemens Gamesa warned on Nov. 24 that a decade-long race to bring down the cost of generating wind power could not continue, as it would reduce the financial muscle of turbine producers to continue investing in new technologies.
($1 = 6.5654 Danish crowns)
(Reporting by Stine Jacobsen, Editing by Louise Heavens) ((email@example.com; +45 21 56 90 10; Reuters Messaging: firstname.lastname@example.org))