Huge U.K. offshore wind farm signs deal to sell power

Source: By William Mathis, Bloomberg • Posted: Tuesday, August 18, 2020

Under the 15-year deal, the subsidiary of Equinor ASA will trade and balance power from 480 megawatts of the Dogger Bank wind farm, about 13% of its capacity. It’s a key step as the developers of the massive wind park move toward a final investment decision.

Dogger Bank is a joint venture between Equinor and Scottish utility SSE PLC. The pair won a government auction to sell power at record-low prices last year.

That contract means that the owners of the wind farm will get paid the same price no matter what happens in the power market. If prices sink the wind farm is protected. But if prices gain in the coming years, as some forecasters predict, the owners will leave money on the table.

The traders at Danske Commodities will sell the power on the market as part of that process. If the price they get is below Dogger Bank’s government contract, then the government will reimburse the difference. If the market price is above the contract, then the wind park owners will pay the government back.