• Professional News
  • 17 December 2013

Offshore wind farm Horns Rev 3 put out to tender

Businesses wishing to participate in the Horns Rev 3 tender must apply for prequalification with the Danish Energy Agency before 23 April 2014. Bech-Bruun renders advice on tender applications, including agreements regarding joint ventures and O&M services as well as offshore wind farm financing.

The Danish Parliament has resolved to establish more new offshore wind farms towards 2020.

The Danish Energy Agency (DEA) has now published the invitation to tender for the first of the new offshore wind farms, Horns Rev 3, in the Official Journal of the European Union. The total installed capacity of Horns Rev 3 will be 400 MW, and the farm is expected to produce energy for 400,000 households.

Businesses wishing to tender for Horns Rev 3 must apply for prequalification with the DEA before 23 April 2014.

So far, only the tender notice has been published. Other tender documents and specifications to tenderers will be available on the DEA’s website at the beginning of 2014.

Other wind farm tender invitations are scheduled to follow in 2014.

The concession will be awarded following a negotiated tender procedure. Initially, the tender therefore pertains to the prequalification of applicants only. A maximum of 10 applicants will obtain prequalification. If the list of qualified applicants includes more than 10 candidates, weight will be given to financial resources and experience in offshore wind farm energy supply.

Applications for prequalification must be submitted to the DEA no later than on 23 April 2014.

Ultimately, the concession for the establishment and operation of Horns Rev 3 will be awarded to the applicant offering the lowest price per kWh produced. To begin with, the prequalified applicants must submit an indicative tender before 2 September 2014.

Following negotiations with the prequalified applicants in the autumn of 2014, the DEA will prepare the final tender documents. The final bids must be based on the final tender documents and the deadline scheduled for submission is on or before 2 February 2015.

Open to large businesses and joint ventures
The tender invitation is targeted at large businesses with offshore wind farm activities. Applicants must have an annual turnover of no less than DKK 15bn.

The DEA recommends that small interested operators approach large operators or sub-contractors or, alternatively, form joint ventures to obtain the necessary financial and technical capacity.

Documentation of financial resources and experience
Applicants must document that they meet the financial and technical requirements. Together with the application, applicants must submit statements of turnover and debt as well as a credit assessment. Moreover, applicants must provide documentation of no more than five offshore wind farms projects in which the applicant has been involved in project development, construction or operation and maintenance. The reference projects may either be completed or in progress.

The successful tenderer must apply for a licence to construct the offshore wind farm and to produce electricity pursuant to the Danish Act on the Promotion of Renewable Energy (VE-loven) and the Consolidation of the Act on Electricity Supply (elforsyningsloven). The successful tenderer must also provide security for the completion of the project. In connection with the subsequent grant of licences, security must also be provided for the decommissioning of the wind turbines. Therefore, the DEA also assesses the applicants as to whether they are able to fulfil such requirements.

How can we help?
Bech-Bruun recently assisted the global energy group E.ON in the sale of 80% of its ownership share in the Rödsand 2 offshore wind farm, which is the third largest offshore wind farm in Denmark. Bech-Bruun has many years of experience in advising operators constructing and operating wind farms.

We offer expert advice on:

  • Drafting and quality assurance of applications to the DEA
  • Interpretation of application and applicant requirements pursuant to tender terms
  • Provision of security and financial resources
  • Financing of offshore wind farm projects
  • Conclusion and interpretation of joint venture and operation and maintenance services agreements
  • Licences pursuant to the Danish Act on the Promotion of Renewable Energy and the Consolidation of the Act on Electricity Supply
  • Questions and issues pertaining to procurement law
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