Siemens, E.ON sign €275M deal for offshore wind

E.ON (OTC: EONGY) said today it signed an agreement to buy 90 wind turbines from Siemens Energy (NYSE:SI) for a wind farm off the Denmark coast.

The project, including two years of service, is valued at €275 million ($326 million USD). The turbines are expected to be installed in 2010.

The 207-megawatt Rødsand II offshore wind farm is planned to be built south of the Danish island of Lolland in the Baltic Sea. The project is planned 3 kilometers (1.8 miles) from the 72-turbine, 165.6 MW Rødsand I project, also called the Nysted wind farm, which is the largest installed Danish offshore wind farm.

Countries are considering offshore wind because it doesn't affect local landscapes. Offshore turbines are more difficult to maintain and cost more than onshore turbines but have the potential to produce more energy because of strong ocean winds.

Denmark installed the world's first offshore wind farm in 1991. More than a gigawatt in capacity has since been installed worldwide, mostly in the North Sea, according to the European Wind Energy Association (EWEA).

By the end of this year, Denmark and the UK by themselves are expected to account for 1 GW of offshore wind, or 80 percent of Europe's market, the EWEA says (see Walney wind farm gets UK approval and U.K. unveils clean energy plan). Europe's tally is predicted to hit 50 GW by 2020, the group says.   

Worldwide, 419 MW of offshore wind is expected to be installed this year, led by the UK, Belgium, Denmark, Germany, and China.

The Rødsand II project is expected to be one of the largest offshore wind farms in the world. Its 2.3 MW turbines are expected to have rotor diameters of 93 meters.

The companies estimate the project will prevent the equivalent of 700,000 metric tons (1.54 billion pounds) of C0₂ a year.

Siemens says it has approximately 1,800 MW of offshore wind capacity installed or on order.

Siemens and E.ON recently signed a separate agreement for 500 wind turbines with a capacity of 1,150 MW to be installed onshore in Europe and the U.S. in 2010 and 2011 (see E.ON, Siemens in big wind deal).