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Dogger Bank C reaches financial close

By: Tom Russell 02/12/2021 Dogger Bank

General Windfarms

Joint venture partners SSE Renewables and Equinor have reached financial close on Dogger Bank C, the third phase of what is poised to be the world’s largest offshore wind farm once complete in March 2026.

SSE Renewables and Equinor are already constructing the first two phases of the 3.6 GW Dogger Bank Wind Farm with Eni, joint venture partner on Dogger Bank A and Dogger Bank B. Now, with financial close being reached on the project’s third phase, Dogger Bank Wind Farm has passed the last important milestone ahead of its construction delivery programme.

Total investment in Dogger Bank Wind Farm will be around £9 billion, of which around £3 billion is for Dogger Bank C including offshore transmission capex in the range of £900-1000m.

Dogger Bank C has a capacity of 1,200 MW and will generate around 6TWh. In total, Dogger Bank will produce enough clean, renewable electricity to supply 5% of the UK’s demand, equivalent to powering six million UK homes.

Dogger Bank A and Dogger Bank B is a joint venture between SSE Renewables (40%), Equinor (40%) and Eni (20%). On 2 November 2021 SSE and Equinor announced the sell down of a combined 20% share in Dogger Bank C to Eni (10% each) for a total consideration of £140m. The transaction is expected to close in Q1 2022, subject to regulatory and lenders approvals and customary purchase price adjustments. Eni will enter the asset effective from completion of the sell down transaction. Once the transaction is complete, the new overall shareholding in Dogger Bank C will be SSE Renewables (40%), Equinor (40%) and Eni (20%). Extended partner alignment will enable further synergies across, both in the construction and operations phase of the Dogger Bank wind farm.

Financial close on Dogger Bank C has been reached through the financing support of a group of lenders comprising 28 banks and three export credit agencies (ECAs).

Alistair Phillips-Davies, SSE Chief Executive, said: “It is a fantastic achievement to be reaching financial close on the third phase of the world’s largest offshore wind project, just weeks after COP26 concluded in Glasgow and today marks an important early milestone in the delivery of our own Net Zero Acceleration Programme. Our plans will enable delivery of over 25% of UK’s 2030 40GW offshore wind target, whilst also expanding overseas, delivering over 20% of upcoming UK electricity networks investment and deploying the critical flexibility technologies to provide security of supply.

“Construction is well underway on the first two phases of Dogger Bank with work on the third phase already progressing and we look forward to this ramping up in the New Year. As well as providing clean, green power, Dogger Bank is enabling the planned GE blade manufacturing plant in Teesside and a huge number of direct and indirect jobs.”

Pål Eitrheim, Equinor EVP of New Energy Solutions, said: “Reaching financial close on the third phase of Dogger Bank is a significant milestone as it demonstrates that we are on track with developing what will become the world’s largest offshore wind farm. The extensive interest from lenders underpins the attractiveness of UK offshore wind assets and the confidence in SSE and Equinor as developers. The level of interest achieved reflects the quality of the project and enables strong return on equity. As the wind farm’s future operator, we will leverage our offshore execution capability and continue to deliver value for years to come.”

Dogger Bank C is being project financed with gearing of c. 70% for the generation assets. Gearing on the transmission facilities is set at 90% of the forecast OFTO sale proceeds, in line with standard market practice in the sector. Total senior debt facilities is around £2.5 billion plus ancillary facilities of around £435 million.

SSE Renewables is leading on the development and construction of Dogger Bank Wind Farm, and Equinor will operate the wind farm on completion for its expected operational life of around 35 years.

Dogger Bank Wind Farm was awarded exclusive development rights 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.

Phase A (1,200MW) with a strike price of £39.65/MWh (in 2012 prices, CPI-indexed) for delivery in 2023/24. Phases B and C (1,200MW each) with strike prices of £41.61/MWh (in 2012 prices, CPI-indexed) for delivery in 2024/25.

Onshore cable installation civils works for Phase C will start in Q1 2022; construction of the onshore convertor station will commence in Q2 2022. Offshore export cable installation will commence in Q1 2024; Offshore platform installation will commence in Q2, 2024; foundation installation will commence in Q3, 2024; Turbine installation will commence in Q2, 2025. First power is anticipated in Q3, 2025 and full power in Q1, 2026.

Onshore construction is currently underway for Dogger Bank A and Dogger Bank B, with offshore construction on Dogger Bank A due to begin in Q2 2022. First power is expected in Summer 2023 and Summer 2024 for Dogger Bank A and B, respectively, with commercial operations to follow around six months later.

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

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Dogger Bank C reaches financial close

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