A consortium comprising Keppel Offshore & Marine Ltd (Keppel O&M)'s wholly-owned subsidiary, Keppel FELS Limited (Keppel FELS), and Aibel AS, has secured a contract from TenneT Offshore GmbH, a grid operator in the Netherlands and Germany, for the design, engineering, procurement, construction, installation and commissioning of a 900MW offshore HVDC (High Voltage Direct Current) converter station and an onshore converter station. Keppel FELS' share of the contract is worth about S$560m.
Together with its subcontractor ABB (ASEA Brown Boveri), the consortium will also undertake the installation and start-up operations of the offshore and onshore converter stations on site at Germany.
Scheduled to be completed in 2024, the two converter stations will be part of the DolWin cluster servicing offshore wind farms in the German sector of the North Sea. The offshore converter station will be located approximately 130km from the onshore converter station and they will provide grid connection for the offshore wind power plants to transmit and supply electricity to approximately a million households in Germany.
Mr Chris Ong, CEO of Keppel O&M said, "This is Keppel O&M's first major project of this scale and extends our track record in supporting the renewable energy industry. We see opportunities in this segment as the offshore renewables market is expected to increase significantly over time with increasing concerns over climate change. Keppel O&M is able to leverage our expertise in offshore energy infrastructure to offer customised and high quality solutions across the offshore wind farm value chain.
"We are pleased to be selected by TenneT, a leading European transmission system operator, for this large-scale offshore wind project with our partner Aibel. Together with ABB, the consortium is able to provide a comprehensive and cost effective solution for TenneT. Keppel had previously completed a mobile application barge for an offshore substation in Germany as well as an offshore wind turbine installer."
President & CEO of Aibel, Mr Mads Andersen added, "Keppel and Aibel have cooperated on a project basis for several years, and we are pleased to jointly land this contract. It is a result of our strong complementary capabilities and we look forward to executing this project for TenneT to their satisfaction. Aibel is proud to be the preferred supplier in the offshore wind segment and strengthening our position in the ongoing energy industry transformation."
The offshore converter station is a 900MW Gravity Based Structure (GBS) based on Aibel's patented design and will be equipped with living quarters, a helideck and lifting cranes. When completed, it will be able to receive power from three offshore wind farms and convert High Voltage Alternating Current (HVAC) to High Voltage Direct Current (HVDC) before sending it to the onshore converter station via subsea cables. The onshore converter station will then convert the HVDC back to HVAC and transmit to the grid.
Mr Tim Meyerjürgens, COO of TenneT, said, "With DolWin5 we open a new chapter in offshore grid connection technology: For the first time we will realize a direct connection between the wind turbines and TenneT's offshore platform without any further substations. We are convinced to have found an experienced partner with the consortium of Aibel and Keppel FELS with whom TenneT will be able to accomplish this innovative project successfully."
According to Bloomberg New Energy Finance, annual installed capacity in the offshore wind sector is projected to increase from 4.5GW in 2018 to 12GW in 2030, resulting in a total cumulative capacity of 115GW in 2030. The global offshore wind installation CAGR is forecasted at 16% from 2017 to 2030.
The above contract is not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.