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Financial close reached for Dogger Bank A&B

By: Tom Russell 26/11/2020 SSE Renewables and Equinor

General Windfarms

SSE Renewables and Equinor have reached financial close on the first two phases of the Dogger Bank offshore wind farm. Once all three phases are complete in March 2026, it will be the largest offshore wind farm in the world. The funding for the development of Dogger Bank A and Dogger Bank B represents the largest ever offshore wind project financing anywhere in the world.

Total investment in the first two phases of the project will be around £6 billion and has already secured the creation of 320 new 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 £4.8 billion, plus ancillary facilities of around £0.7 billion. Dogger Bank A and B are being project financed with gearing of 65% to 70% for the generation assets. Gearing on the transmission facilities is set to 90% of the forecasted OFTO sale proceeds. The final group of lenders comprises 29 banks and three export credit agencies.

Alistair Philips-Davies, SSE's Chief Executive, said: “We are proud to be leading on the construction and development of Dogger Bank Wind Farm, which has been 10 years in the making. We are putting our money where our mouth is on delivering net zero and reinforcing the UK’s position as a world leader. This investment will help drive a green recovery from coronavirus through the project’s construction over the next five years, creating jobs and boosting the local economy.

“Achieving financial close for the first two phases of the world’s largest wind farm is a huge accomplishment and, alongside reaching Seagreen 1 financial close earlier this year, represents significant progress towards achieving our goal of trebling our renewable output by 2030.”

Pål Eitrheim, Equinor's EVP of New Energy Solutions, said: “Reaching financial close on the two first phases of Dogger Bank is a major milestone, demonstrating our commitment to profitable growth within offshore wind. The extensive interest from lenders, underpins the attractiveness of UK offshore wind assets and confidence in SSE and Equinor. As the wind farm’s future operator, we are proud to take this big step forward in delivering what will be the backbone of a growing wind hub in the North Sea. Through the sheer scale of the project we have delivered record-low contract prices for the UK market, and as operator of the wind farm we will continue to deliver value to the UK for years to come.”

The Dogger Bank wind farms are located more than 130 km from the Yorkshire coast. SSE Renewables is leading the construction of the wind farm, and Equinor will operate the project during its lifetime of at least 25 years. Further to Dogger Bank A and Dogger Bank B, the two companies are also developing the Dogger Bank C project for which it is expected that a financial decision will come in late 2021. The projects will be capable of powering up to 4.5 UK million homes each year when complete in 2026.

Due to its size and scale, the overall wind farm is being built in three consecutive 1.2 GW phases. Each project is expected to generate around 6 TWh of electricity annually. The Dogger Bank Wind Farm secured 3.6 GW of offshore wind contracts in the UK Government’s 2019 Contracts for Difference (CfD) auctions. The CfDs awarded provide overall price certainty to each phase of Dogger Bank Wind Farm for a period of 15 years.

The offtake PPAs being announced today for Dogger Bank A and Dogger Bank B cover a matching 15-year term from the start of the CfDs awarded to each project. The commercial power agreements provide a route to sell the green energy generated by both wind farms into the GB electricity market when they each enter operations.

For more information on offshore wind farms worldwide, click here.

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Financial close reached for Dogger Bank A&B

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