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World's Cheapest Offshore Wind Farm to Power 600,000 Homes

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World's Cheapest Offshore Wind Farm to Power 600,000 Homes

Sweden's Vattenfall set a world record for the lowest price ever paid for offshore wind power. The state-owned energy company bid EUR 49.9 (or $54) per megawatt-hour to develop the Danish Kriegers Flak, a 600-megawatt offshore wind farm in the Baltic Sea, about 15 kilometers off the Danish island Møn. Kriegers Flak. For comparison, the average cost of offshore wind is around $126 per megawatt-hour.

Kriegers Flak, the world's first offshore electricity 'Supergrid'Ministry of Foreign Affairs of Denmark

The Kriegers Flak is set for operations by 2022 and will be Denmark's largest offshore wind farm. The farm will be able to supply 600,000 households with renewable energy, or 23 percent of all Danish households.

As a pioneer in wind power, having installed its first turbines in the mid-1970s, Denmark's latest renewable energy project puts the country on track to meet its 2020 goal of getting 50 percent of its power from renewables. The nation plans to ditch fossil fuels entirely by 2050.

“The announcement is an essential milestone for our ambition to increase our production of renewable power," Vattenfall CEO Magnus Hall said. "We are already the second largest offshore player globally. The winning bid of EUR 49.9 per megawatt-hour proves that Vattenfall is highly competitive and brings down the costs for renewable energy."

Kriegers Flak, expected for operation by 2022, is a 600 megawatt offshore wind farm in the Baltic Sea.Vattenfall

Vattenfall has now won tenders for three major offshore wind farms—Horns Rev 3, Danish Near Shore and Kriegers Flak. The company invested between 1.1–1.3 billion EUR in Kriegers Flak, pending a final investment decision.

"Our winning bid for Kriegers Flak is 58 percent below the original cap of EUR 0.12. For the Danish Near Shore project the bid was also substantially below its cap," Vattenfall head Gunnar Groebler said. "Proceeding with these two projects, Vattenfall provides Denmark with a cost efficient contribution to meet the country's climate targets and customers's demand for renewable energy."

Denmark's newest offshore wind farm will be constructed in a 132-square-kilometer area in the Baltic Sea, an area that will be home to the world's first "Supergrid." The area actually consists of three sections dedicated to wind power development in Germany, Sweden and Denmark.

The Supergrid will ideally supply cheap renewable energy to a large swath of European consumers and enable electricity trading between individual countries—all while decreasing Europe's need for imported fossil fuels. The idea is that it's always windy somewhere.

"In close partnership with their regional neighbors, Sweden and Germany, the Kriegers Flak area in the Baltic Sea, has been chosen as the first place in the world to have an offshore electricity grid," Denmark's Ministry of Foreign Affairs website boasts. "The planned 600 megawatt offshore wind farm will act like a 'Supergrid,' eventually being able to transmit renewable energy through power grids to all three countries.

"The 'Supergrid' would serve three purposes: Bring renewable energy to European consumers, strengthen regional energy markets and increase the security of supply by providing transmission capacity."

According to a Vattenfall press release, the Swedish part of Kriegers Flak has a building permit that expires in 2018 and the German part has not yet been tendered.

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