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Vestas partners with Swedish utility, Vattenfall, and Danish pension fund, PKA, for 353 MW wind energy project in Sweden

With wind energy becoming the lowest cost of energy solution in many markets, the global wind energy market is expanding and creating new opportunities that involve new customer segments, partnership constellations, technology solutions and financing structures. As the global leader in wind energy, Vestas continues to be highly involved in this evolution and is together with key partners developing solutions that address a wind park’s full value chain and hereby maximise return on investment and profitability.

Highlighting this development, Vestas has today entered into a partnership with Swedish utility, Vattenfall, and Danish pension fund, PKA, for a 353 MW wind energy project in Sweden. For the project, which is PKA’s first investment in onshore wind, Vestas will provide 353 MW of V136-4.2 MW turbines as well as become a shareholder through a share purchase agreement for 40 percent of the project. PKA and Vattenfall will own 30 percent project equity each. The project’s total construction funding is around EUR 350m and will be partially funded by non-recourse project financing while financial close is expected to be finalised in the coming months.

To grasp further opportunities in this emerging space and develop additional revenue streams, Vestas aims to engage in project solutions with customers and investors that have strong track records within sustainable energy. Depending on project and customer needs, such solutions may include co-development, financial solutions or equity investments, and hereby go beyond supplying, installing, and servicing turbines as well as full engineering, procurement and construction projects. By doing so, Vestas secures project pipeline and creates attractive and profitable investment opportunities.

The cost of renewable energy is going down, which is making the market more competitive and creating new opportunities. In this dynamic market, we continue to leverage our deep expertise across the entire value chain to develop solutions with our customers that produce the lowest cost of energy. With our partners on this project, I believe we have shown our ability to tailor the right solutions and, in doing so, advance our business according to our strategy”, states Anders Runevad, President and CEO of Vestas.

The project has been developed by Vattenfall and consists of 84 V136-4.2 MW turbines to be installed across the Blakliden and Fäbodberget wind parks located in Åsele and Lycksele Municipality in central Sweden. Blakliden and Fäbodberget wind parks will consist of 50 and 34 turbines respectively.

“It is highly gratifying that we can now continue our expansion of onshore wind farms in Sweden. Blakliden/Fäbodberget represents an important step in our strategy to become fossil free within one generation. It is also important for Vattenfall to demonstrate that we are making a major investment in renewables in Sweden”, says Magnus Hall, President and CEO of Vattenfall.

Having previously invested in five offshore wind parks, PKA’s first investment in onshore wind underlines the attractive investment case onshore wind energy offers from a pension fund’s perspective. Peter Damgaard, CEO of PKA says:

The model created for this investment can be copied to other similar investments as we have seen it with our investments in offshore wind parks. We focus on this type of investments because we continue to find interesting opportunities in combining good returns to our members with mitigation of climate change. For us it is good business and common sense, and we therefore don’t expect this to be our last investment in onshore wind”.

Nils de Baar, President of Vestas Northern and Central Europe adds “This project underlines Vestas’ strong ability to work with our partners to optimise projects to make them even more competitive, which is key to our continued market-leadership in Sweden. Both Vattenfall and PKA have strong track records within sustainable energy and we are honoured to partner with them on a project that exemplifies how Vestas’ solutions meet the full scope of our customers’ challenges, including financing”.

The order includes supply and installation of the wind turbines as well as a 25-year Active Output Management (AOM 5000) service contract. Turbine delivery is expected to begin in first half of 2021 with full commissioning planned for fourth quarter of 2021.