RWE wins 1-GW Thor in Danish offshore wind lottery

German energy group RWE AG (ETR:RWE) secured a concession to build the 1-GW Thor offshore wind farm, set to become Denmark’s largest, after the Danish Energy Agency (DEA) drew the winner’s name in a lottery today.

The winner was decided by lottery since more than one bidder offered to build the 800-MW to 1,000-MW project to its highest permissible capacity and at a minimum price of DKK 0.01 (USD 0.0015/EUR 0.0013) per kWh, DEA said of the tender rules without revealing names of the final contenders.

RWE was up against who is who in the global offshore wind sector, including Ørsted A/S (CPH:ORSTED), Iberdrola SA (BME:IBE) and SSE Renewables.

DEA expects to sign the concession agreement with RWE’s entity Thor Wind Farm I/S within four to six weeks, the agency said.

Based on anticipated electricity prices, the Danish state stands to pocket DKK 2.8 billion (USD 427m/EUR 376.5m) in revenue over the first few years of the wind farm’s production under the contract-for-difference (CfD) model chosen for the tender. After that period expires, RWE will no longer have to pay the state anything, and the wind farm will operate purely on commercial terms, DEA explained.

Total investment costs for the Thor project are expected to stand at around DKK 15.5 billion. RWE, as the winner, will pay for the offshore and onshore connection infrastructure and landing cables.

Denmark’s largest offshore wind farm will located a minimum 22 kilometres (13.7 miles) from the west coast of Jutland, and should be connected to the grid no later than at the end of 2027. It is authorised to operate for 30 years with an option for a five-year extension.

(DKK 1.0 = USD 0.153/EUR 0.134)

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