Dogger Bank Wind Farm owners, SSE Renewables and Equinor, have announced financial close on the first two phases of the project, representing in aggregate the largest offshore wind project financing to date globally. With a capacity of 3.6GW, Dogger Bank will be the largest offshore wind farm in the world when operational.
The project is being built in three 1.2GW phases, with the first two phases being constructed at the same time to maximise the synergies resulting from their geographical proximity and make use of common technology and contractors. As such, the two phases are being financed concurrently with all lenders participating in each phase in equal proportions.
The third phase, Dogger Bank C, is being developed on a different timescale with financial close to follow at a later stage.
With the strong interests from lenders, Dogger Bank A and B were able to secure competitive terms, despite unprecedented economic circumstances arising from the global coronavirus pandemic. The final group of lenders, comprising 29 banks and three export credit agencies, includes the most experienced lenders in the sector along with many relationship lenders of both SSE Renewables and Equinor. The level of interest achieved reflects the high quality of the project and enables strong returns on shareholder capital to be delivered.
Dogger Bank A and B will each require total capital expenditure of around GBP3bn, including offshore transmission capex of around £800m per phase. Investment in the first two phases of the project has already secured the creation of 320 new skilled jobs for the North East of England associated with the development and operation of the wind farm, with more to come as construction ramps up.
The total senior debt facilities across the two phases is GBP4.8bn, plus ancillary facilities of around GBP0.7bn. Dogger Bank A and B are being project financed with gearing of between 65% and 70% for the generation assets. Gearing on the transmission facilities is set at 90% of the forecast OFTO sale proceeds.
Located over 130 km off the north east coast of England, Dogger Bank Wind Farm will be the first project to use the largest commercially available turbine in the world, the 13MW GE Haliade-X. When fully completed in 2026, each phase of Dogger Bank Wind Farm will be able to produce 6TWh of renewable electricity, totalling 18TWh annually – enough to supply 5% of the UK’s demand and equivalent to powering six million UK homes each year*.
Dogger Bank Wind Farm was awarded exclusive development rights for fifty years in 2010 by The Crown Estate as part of its third seabed licensing round. The project secured planning consent in 2015. In September 2019, Dogger Bank Wind Farm secured the following 15-year contracts with the Low Carbon Contracts Company (LCCC) through the UK Government’s Contract for Difference (CfD) auction:
- Dogger Bank A (1,200MW) with a strike price of £39.65/MWh (in 2012 prices, CPI-indexed) for delivery in 2023/24.
- Dogger Bank B and C (1,200MW each) with strike prices of £41.61/MWh (in 2012 prices, CPI-indexed) for delivery in 2024/25.
Onshore construction is currently underway for Dogger Bank A and Dogger Bank B, with offshore construction for Dogger Bank A due to begin in Q2 2022. For both phases, onshore and offshore cable and all turbine foundations will be installed by 2023. First power is expected in Summer 2023 and Summer 2024 for Dogger Bank A and B, respectively, with commercial operations to begin the following year.