Siemens and Mainstream win contract to develop 4GW of wind farms off the UK coast

The SMart Wind consortium, led by Mainstream Renewable Power and Siemens Project Ventures (SPV), a division company of Siemens Financial Services, has been awarded a contract to develop 4 GW of wind farms by 2020 as part of The Crown Estate’s Round 3 offshore wind farm programme.

SMart Wind will develop wind power projects in the “Hornsea” zone, comprising 4,735 square kilometres off the UK’s Yorkshire coast. Hornsea is one of nine zones to be developed in the seas around Great Britain as part of The Crown Estate’s Round 3 programme, and with a total planned installed capacity of 32 GW this is enough to meet a quarter of the UK’s electricity needs.

The contract for Hornsea was signed in London on December 22, 2009. Siemens Project Ventures and Mainstream Renewable Power developed a vertically-integrated strategy which will take a modular approach to project design, development and delivery. The two companies have brought together their expertise in offshore wind farm development, consenting, construction, operations and maintenance as well as large-scale infrastructure project financing. With a total investment of more than EUR 111 bn (£ 100 bn) for all nine zones, the wind farms are to become part of the world’s largest wind energy infrastructure programme.

To develop the wind farms in the Hornsea zone off the northeastern coast of England, the Siemens-equity company Siemens Project Ventures GmbH and Mainstream Renewable Power established the project-development company SMart Wind Limited, in which each partner holds a 50 percent stake. Siemens Energy Sector companies are expected to supply wind turbines and offshore substations. As part of the wider consortium, Hochtief Construction AG is planned to be the strategic partner responsible for constructing other parts of the wind farms. The Siemens Energy Sector has already been brought into the Hornsea zone development and planning phase. The first project is expected to be ready for construction by 2014.

Commenting on the announcement, Mainstream Renewable Power’s Chief Executive, Dr Eddie O’Connor, said, “Through a combination of innovation and expertise and by working in close collaboration with The Crown Estate, we’re confident that we’ll deliver in record time. This is about delivering a whole new industry for the UK, one that provides sustainable, secure and indigenouspower as well as tens of thousands of new jobs throughout the supply chain. This will have a major impact on the long-term economic development of the UK as well as positioning it as the global leader in offshore wind generation. It is our intention to work closely with local communities to ensure that this new industry brings real opportunities for jobs, training and new business”.

Siemens UK CEO, Andreas J. Goss said: “Siemens is the UK’s leading provider of wind turbines in the UK and the leading provider for offshore wind connections. We welcome a stable market for investment in wind power and recognise the potential of the Round 3 offshore wind projects. Siemens is making significant investments in the UK – one example is building our offshore gridconnection Competence Centre for northwestern Europe here in Manchester. We will continue to invest to ensure that we are uniquely placed to deliver the required wind-power capacity and the innovative systems to bring the power to the shore”.

“The bidding consortium is an ideal combination of the development experience as well as financial capacities of both partners”, said Dr. Wolfgang Bischoff, CEO of Siemens Project Ventures at Siemens Financial Services. “The involvement in Round 3 represents another step that will strengthen Siemens’ environmental portfolio. At the same time, the programme will secure thousands of new jobs: RenewableUK (formerly The British Wind Energy Association) estimates that the number of jobs in the UK’s wind industry will increase from 5,000 today to 60,000 in 2020”.

Energy and Climate Change Secretary Ed Miliband said: “Our island has one of the best windenergy resources in Europe, and today’s news shows we’re creating the right conditions for the energy industry to invest in harnessing it. This is one of the strongest signals yet that the UK is locked irreversibly into a low-carbon, energy-secure prosperous future”.

Roger Bright CB, Chief Executive of The Crown Estate said: “I am delighted to announce that the SMart Wind Consortium has been awarded the right to develop the ‘Hornsea Zone’ (Zone 4) in our Round 3 offshore wind programme. The 32GW of installed capacity proposed by the offshore wind3 energy developers for 2020 would supply a quarter of the UK’s electricity needs. This means the UK will have a secure and low-carbon electricity supply. In addition, the UK economy will benefit as offshore wind is a growth industry that will create new businesses and jobs as well as attract inward investment. The Crown Estate has the vested rights to develop the UK seabed for renewable energy and will continue to be a co-investor up to the point of consent. Our role now is to work together with our development partners to help deliver the projects”.

In fiscal year 2009, Siemens generated revenue of nearly EUR 23 bn (app. £ 20,7 bn) from environmental technology, or about 30 percent of all Siemens revenue. In 2010, Siemens intends to increase the share from environmental technologies to around EUR 25 bn (app. £ 22,5 bn).

Key facts on the zone – Hornsea (Zone 4)

* The Hornsea zone will provide enough electricity to meet 4% of all electricity demand in the UK and power approximately 3 million homes.
* The UK goal for renewable electricity generation is approximately 30%. Hornsea’s offshore generation will account for approximately 12% of that target.
* The width of the Hornsea zone is approximately equivalent to the width of the UK from Liverpool to Hull.
* The total zone area is 4,735 km².
* The zone lies between 34km and 190km off the Yorkshire coast.
* Water depths across the zone are predominantly between 30 and 40m, with maximum depths to 70m.
* The zone is adjacent to the River Humber, 200km south of Newcastle and 75km north of The Wash.
* The Humber estuary is triangulated by three main population centres, Hull to the north, Grimsby to the southeast and Scunthorpe to the southwest.

The full press release as well as further information, facts and figures on each zone cane be found on

Mainstream Renewable Power: Since its inception in February 2008, Mainstream Renewable Power has grown to become a global company with 100 employees across seven countries and four continents. Mainstream’s mission is to work together with partners and communities to deliver a successful business that accelerates global progress towards a sustainable future. The company’s vision is of a future where economies can thrive, free from the restrictions of fossil fuels. Mainstream has the passion, the expertise and the resources to make that vision a reality.

Mainstream’s Centre of Excellence for Offshore Wind in London combines a dynamic and entrepreneurial team that is united by a passion and vision to deliver commercially viable projects at pace and at scale. Building on the experience of key individuals responsible for developing the Greater Gabbard Offshore Wind Farm, the team continues to attract key experienced individuals from the UK offshore wind industry and beyond. To date the team has secured development rights for the 450 MW Neart na Gaoithe offshore wind farm in Scotland and is developing the 1GW Horizont project in German waters.

Siemens Financial Services/Siemens Project Ventures: Together with renowned partners, Siemens Project Ventures (SPV) has with equity capital contributions been involved worldwide in the development of infrastructure projects, particularly in the energy, transport and telecommunication sectors. SPV has already participated in the development of 11 international power plant projects with an overall capacity of more than 7.000 MW as well as in three telecommunication projects, two medical centers and an airport, with a cumulative project volume of 7 billion USD. SPV is a Group company of Siemens Financial Services GmbH (SFS), an international provider of financial solutions in the business-to-business area. With about 1,900 employees and an international network of financial companies coordinated by Siemens Financial Services GmbH, Munich, we support Siemens as well as non-affiliated companies, focusing on the three sectors of energy, industry and healthcare. We finance infrastructure, equipment and working capital and act as a competent manager of financial risks within Siemens. By leveraging our financing expertise and our industrial know-how we create value for our customers and help them strengthen their competitiveness.

The Crown Estate: On behalf of the nation, The Crown Estate manages a highly diverse property portfolio across the United Kingdom. Our job is laid down by Parliament; to enhance the value of the estates we manage; and to earn a surplus for the benefit of the UK taxpayer. Our multi-million property and land portfolio annually contributes over £200 million to the Treasury and encompasses four main estates; urban, rural, Windsor and marine. Operating on commercial principles balance with a strong sense of stewardship, we take our responsibility to manage our assets sustainably very seriously. The marine estate comprises of virtually the entire seabed out to the territorial limit approximately 12 nautical miles (nm) from the coast, including the rights to explore and utilise the natural resources of the UK continental shelf (excluding oil, gas and coal).