DONG Energy and Siemens enter into a new supply agreement regarding offshore wind turbines

Siemens to deliver wind turbines and grid connection for Offshore Wind Farm Lincs in UK

Erlangen, Germany / Copenhagen, Denmark, Siemens and DONG Energy have further expanded their cooperation in offshore wind power. In March 2009, DONG Energy and the Siemens Energy Sector entered into an agreement for the supply of up to 500 offshore wind turbines with a total capacity of up to 1,800 megawatts. The supply agreement was the world’s largest agreement of its kind and the parties took a big step towards the industrialization of the offshore wind segment. The implementation of the supply agreement is well on track. Approximately 1,000 MW under the agreement have been utilized for the 367 MW offshore wind project Walney 1 and 2 and for the 630 MW offshore wind project London Array. Today, DONG Energy and Siemens have agreed to further utilize and expand the off take under the supply agreement signed in March 2009 as Siemens will deliver 75 3.6 MW turbines to the 270 MW offshore project Lincs, located in the UK in the North Sea.

DONG Energy has earlier today announced its participation in the Lincs project together with Siemens Project Ventures. Additionally, Siemens has been chosen as the design-build contractor for grid connection including offshore substation, onshore substation and the laying of the cables onshore.

The turbines for the Lincs project will, as well as for the Walney 2 and London Array projects, be delivered with the newest version of Siemens offshore wind turbine with a large 120 meter rotor. The two first versions of the new 120 meter rotor have recently been erected close to DONG Energy’s power plant, Avedøreværket, in Copenhagen.

DONG Energy and Siemens have furthermore expanded their collaboration and the scope set out in the supply agreement entered into earlier this year with a view to utilize the parties’ experience and take offshore wind power one step further. Thus, the supply agreement has been expanded to include further potential volumes of turbine deliveries to be used for DONG Energy’s Northern European project pipeline. Specific project conditions, including applicable approvals and consents, as well as project economics will determine whether the individual projects will be built. Furthermore, the parties have agreed on a number of adjustments to the supply agreement which is expected to have a positive impact on the project economics going forward for both ongoing and coming projects.

Anders Eldrup, CEO of DONG Energy, said “With these potential further supplies from Siemens, DONG Energy is well positioned to maintain our leading position within offshore wind. The agreement is an important step for DONG Energy in progressing and realizing the projects in our pipeline. This will secure the growth within the offshore wind business area and support the transformation of our business towards a greener profile.”

“The expanded supply agreement with Dong Energy is the world’s largest agreement of its kind and will further strengthen our position as the clear market leader in offshore business,” said Wolfgang Dehen, CEO of the Siemens Energy Sector. “It also supports our goal to grow faster than the market in order to become one of the top 3 suppliers worldwide in the wind power market by 2012.”

DONG Energy and Siemens are leading players in the offshore wind industry and have a history of working together on innovative projects. In 1991 the two companies constructed the world’s first offshore wind farm at Vindeby in Denmark and have since then worked together on many offshore projects including, for example, Middelgrunden near Copenhagen (Denmark), Nysted in Southern Denmark, Burbo Bank in Liverpool Bay (UK), Horns Rev 2 (Denmark) and the soon to be commissioned Gunfleet Sands I+II (UK).

Wind energy is part of Siemens’ Environmental Portfolio. In fiscal 2009, revenue from the Portfolio totaled about EUR23 billion, making Siemens the world’s largest supplier of ecofriendly technologies. In the same period, our products and solutions enabled customers to reduce their CO2 emissions by 210 million tons.

The Siemens Energy Sector is the world’s leading supplier of a complete spectrum of products, services and solutions for the generation, transmission and distribution of power and for the extraction, conversion and transport of oil and gas. In fiscal 2009 (ended September 30), the Energy Sector had revenues of approximately EUR25.8 billion and received new orders totaling approximately EUR30 billion and posted a profit of EUR3.3 billion. On September 30, 2009, the Energy Sector had a work force of more than 85,100. Further information is available at: www.siemens.com/energy.

DONG Energy is one of the leading energy groups in Northern Europe. We are headquartered in Denmark. Our business is based on procuring, producing, distributing and trading in energy and related products in Northern Europe. We have approximately 6,000 employees and generated more than DKK 60 billion (EUR 8.2 billion) in revenue in 2008. For further information, see www.dongenergy.com