DONG Energy brings deep pockets and a long track record to its bid to build a massive wind farm off Martha’s Vineyard
By Jon Chesto GLOBE STAFF NOVEMBER 13, 2015
Six months ago, few New Englanders had heard of DONG Energy. But that is likely to change soon as the Danish company with a quirky acronym for a name pursues its plans to build a massive offshore wind farm south of Martha’s Vineyard.
The roughly $10 billion-a-year behemoth is already a major player in the European energy market, with deep pockets and a nearly 25-year track record of building turbines in the ocean, making it the global leader in the offshore wind business.
That history will prove helpful as DONG eyes a North American expansion from its new office in Boston’s Financial District. The company’s expertise and its ability to dedicate more than $1 billion a year to offshore projects could give it a significant edge over two other wind developers that also have rights for federal waters south of New England.
“[DONG has] more experience than pretty much anybody in the world at this point,” said James Manwell, a professor at the University of Massachusetts Amherst and director of its wind energy center. “The fact they decided to come over here, it’s a bit of a gamble, but maybe they feel they have enough experience that it’s worth the gamble.”
The Danish government-owned company got its start managing fossil-fuel projects in the North Sea four
decades ago. Its name, translated, stands for Danish Oil and Natural Gas, a reference to those early ventures.
In 2006, several Danish energy companies were merged into one company under the DONG umbrella. Among them was Elsam, which built the world’s first large-scale offshore wind farm, known as Horns Rev 1, several years earlier, as well as the first one ever, back in 1991.
DONG’s ventures benefited significantly from government incentives for clean energy across Europe, some of them created specifically for offshore wind. The Danish government, for example, has a target of ensuring that all of the country’s electricity can come from renewable sources by 2050.
By 2014, wind energy represented nearly 15 percent of DONG’s revenue and nearly 40 percent of operating profit. The offshore wind division is now the biggest in the world, with about 2,000 people and 14 offshore wind farms.
But amid expansion, controversy swirled. In an effort to help finance the offshore wind expansion and stabilize its finances, DONG accepted a $1.5 billion investment early last year from Goldman Sachs. The New York bank’s involvement sparked furor from the Danish public, with many residents upset because an international investment bank would play a major role in a Danish utility.
By this past spring, DONG executives had started to cast their sights across the Atlantic, seeing untapped opportunity in the relatively shallow waters and powerful breezes off New England’s coastline.
Samuel Leupold, the head of DONG’s wind operations, said the company recognized that the offshore wind industry was starting to develop in the United States. It made sense, if just for competitive reasons, for it to figure out a way into this nascent market.
“We’re the current number one,” Leupold said. “Why should we give up that position? If the market is moving outside Europe, the success story we have in Europe can be repeated.”
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