Lego: Brick by Brick

It was only ever a matter of time before the likes of Lego started getting serious about offshore turbines. Investing in the clean energy generators, brick by brick.

Yes, admittedly they’ve already got a couple of (very speculative!) towers in the water but the announcement early last Thursday morning was the first time that they’ve really got out the cheque book.

And it was a big cheque. In agreeing to acquire a 50% stake in 277MW, 77-turbine Borkum Riffgrund 1, a project due to be developed by DONG Energy between now and the end of 2014, the Danish firm has confirmed an investment of 4.7 billion kroner ($840m). And in doing so, has taken another significant step towards fulfilling its wider fundamental values and objectives.

For DONG Energy of course, the rationale behind the acquisition is irrelevant. Moreover, the key for the €7 billion revenue European energy business was to find a suitable partner willing to help stump up the development and build costs and in doing so, shift the risk off the balance sheet.

But then of course, this isn’t new ground for DONG. The sale of the wind farm, located 55km off the north-western coast of Germany, is the fifth stake sale that the business has handled – with stakes in three previous sites sold to Dutch and Danish pension funds and with a further UK site stake sold to Marubeni Corporation.

Nevertheless, the sale still marks a significant milestone – since this is the first time that the energy sector has been selling direct to corporate customers. And candidly, that, coupled with the fact that construction isn’t due to start until next year – means that DONG's deal was no mean feat.

Whether the deal does in fact mark a new chapter in offshore wind energy finance – as suggested by chief executive, Anders Eldrup – remains to be seen.

However, as the diversity of prospective offshore wind energy investors continues to unfold, this increased level of engagement can only ever help to drive down the cost of capital and underline the wider market opportunity that taking a long term investment in wind energy presents.

It was only ever a matter of time before the likes of Lego started getting serious about offshore turbines. Investing in the clean energy generators, brick by brick.

Yes, admittedly they’ve already got a couple of (very speculative!) towers in the water but the announcement early last Thursday morning was the first time that they’ve really got out the cheque book.

And it was a big cheque. In agreeing to acquire a 50% stake in 277MW, 77-turbine Borkum Riffgrund 1, a project due to be developed by DONG Energy between now and the end of 2014, the Danish firm has confirmed an investment of 4.7 billion kroner ($840m). And in doing so, has taken another significant step towards fulfilling its wider fundamental values and objectives.

For DONG Energy of course, the rationale behind the acquisition is irrelevant. Moreover, the key for the €7 billion revenue European energy business was to find a suitable partner willing to help stump up the development and build costs and in doing so, shift the risk off the balance sheet.

But then of course, this isn’t new ground for DONG. The sale of the wind farm, located 55km off the north-western coast of Germany, is the fifth stake sale that the business has handled – with stakes in three previous sites sold to Dutch and Danish pension funds and with a further UK site stake sold to Marubeni Corporation.

Nevertheless, the sale still marks a significant milestone – since this is the first time that the energy sector has been selling direct to corporate customers. And candidly, that, coupled with the fact that construction isn’t due to start until next year – means that DONG's deal was no mean feat.

Whether the deal does in fact mark a new chapter in offshore wind energy finance – as suggested by chief executive, Anders Eldrup – remains to be seen.

However, as the diversity of prospective offshore wind energy investors continues to unfold, this increased level of engagement can only ever help to drive down the cost of capital and underline the wider market opportunity that taking a long term investment in wind energy presents.

It was only ever a matter of time before the likes of Lego started getting serious about offshore turbines. Investing in the clean energy generators, brick by brick.

Yes, admittedly they’ve already got a couple of (very speculative!) towers in the water but the announcement early last Thursday morning was the first time that they’ve really got out the cheque book.

And it was a big cheque. In agreeing to acquire a 50% stake in 277MW, 77-turbine Borkum Riffgrund 1, a project due to be developed by DONG Energy between now and the end of 2014, the Danish firm has confirmed an investment of 4.7 billion kroner ($840m). And in doing so, has taken another significant step towards fulfilling its wider fundamental values and objectives.

For DONG Energy of course, the rationale behind the acquisition is irrelevant. Moreover, the key for the €7 billion revenue European energy business was to find a suitable partner willing to help stump up the development and build costs and in doing so, shift the risk off the balance sheet.

But then of course, this isn’t new ground for DONG. The sale of the wind farm, located 55km off the north-western coast of Germany, is the fifth stake sale that the business has handled – with stakes in three previous sites sold to Dutch and Danish pension funds and with a further UK site stake sold to Marubeni Corporation.

Nevertheless, the sale still marks a significant milestone – since this is the first time that the energy sector has been selling direct to corporate customers. And candidly, that, coupled with the fact that construction isn’t due to start until next year – means that DONG's deal was no mean feat.

Whether the deal does in fact mark a new chapter in offshore wind energy finance – as suggested by chief executive, Anders Eldrup – remains to be seen.

However, as the diversity of prospective offshore wind energy investors continues to unfold, this increased level of engagement can only ever help to drive down the cost of capital and underline the wider market opportunity that taking a long term investment in wind energy presents.