Statoil cuts costs 15 per cent on latest offshore wind farm as it further greens its portfolio

Drone view of the Dudgeon wind farm. Image: Jan Arne Wold - Woldcam / Statoil

Dudgeon offshore wind farm operator Statoil and partners Masdar and Statkraft say they delivered the 67 turbine project 15 per cent under budget on its opening this week.

The 402 megawatt wind farm in Great Yarmouth is now delivering electricity to the U.K. grid, providing renewable energy to around 410,000 homes.

Since the investment decision was made in 2014, construction costs have been reduced from GBP 1.5 billion to approximately GBP 1.25 billion.

“Dudgeon represents an important contribution to realizing the U.K.’s renewable energy strategy,” Statoil chief executive officer Eldar Sætre said in a statement. “The U.K. has already achieved impressive reductions in CO2-emissions with clear policies to phase out coal, and last year achieved the lowest CO2 emissions since before year 1900. Statoil is proud to contribute to this both by being a large supplier of natural gas and by our investments in offshore wind.”

The opening also moves the Norwegian state controlled company further into the green energy sector as it leverages its offshore oil and gas expertise to complement its portfolio with profitable renewable energy solutions. "As part of our strategy to develop from an oil and gas company to a broad energy major, Statoil will grow significantly in profitable renewable energy, with an ambition to invest around NOK 100 billion towards 2030,” said Sætre.

It comes as Norway's trillion-dollar sovereign wealth fund is proposing to drop oil and gas companies from its benchmark index, in part to make the Norwegian government's wealth less vulnerable to a permanent drop in oil prices.

It also comes as the U.K. government doubles down on electric vehicles to reduce emissions from the transportation sector. In its budget this week, the government announced a £400 million fund for EV charging infrastructure projects across the country and pledged to invest an extra £100 million to help people buy EVs and £40 million toward charging research and development. The more renewables are feeding the grid, the greener EVs become.

Also this month, California Gov. Jerry Brown met with top Statoil executives to discuss the company's pursuit of wind power off the Golden State's coastlines. Because of the depth of its continental shelf, the state would likely require floating wind turbine technology, another specialty of Statoil, which has in its portfolio Hywind Scotland, the world’s first floating offshore wind farm that came into production in October.

Statoil’s current offshore wind portfolio, which includes the Sheringham Shoal wind farm in the U.K. and the Arkona wind farm in Germany, has the capacity to provide more than one million homes with renewable energy.

Dudgeon is located 40 kilometres off the coast of Norfolk in England. Local suppliers account for more than 40 per cent of the value creation in the project.

Toward 2030 it is estimated the installed capacity of offshore wind in Europe can grow from 12 GW (2016) to 70 GW. Improved technology, increased deployment and lower costs are the key drivers turning offshore wind into an attractive power source, outcompeting traditional sources of energy in important markets, Statoil said.