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UK approves Dong’s 1.8GW offshore project

Having received the green light from the government, the Danish utility will begin fundraising for the £6bn wind farm.

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Offshore wind developer Dong Energy has received UK government approval to build the 1.8GW Hornsea Project Two.

The project will cost around £6 billion ($7.8 billion; €6.9 billion) and will be located 89km off the Yorkshire Coast. The Danish utility said it will consist of up to 300 turbines and will power around 1.6 million UK homes per year. The scheme has yet to qualify for a subsidy, a vital step for a project of this size and expense.

The UK's approval, a Development Consent Order, covers all facets of the project including turbines, foundations offshore and onshore substations, array cables and export cables. Dong's Hornsea Project One is a 1.2GW development which reached financial close earlier this year.

“Britain is a global leader in offshore wind, and we're determined to be one of the leading destinations for investment in renewable energy, which means jobs and economic growth right across the country,” Business and Energy Secretary Greg Clark said in a statement.

Dong Energy published earlier this month its first results since holding an IPO that valued the company at DKr98.2 billion ($15 billion; €13 billion). In those results, Dong said offshore wind would continue to be its growth engine going forward, despite the UK's vote to leave the EU. It said its wind power unit's earnings increased by 68 percent compared to the same period last year.

In July, Dong said it won the rights to build the 700MW Borssele 1 and 2, with a bid of €72.70 per MWh. It also invested in the Borkum Riffgrund 2 project, off the coast of Germany, bringing its total offshore capacity to 6.7GW. Dong has stakes in some of the UK's other large-scale offshore projects, including the 258MW Burbo Bank Extension, the 659MW Walney Extension and the 573MW Race Bank project.

The offshore wind industry is gaining momentum across Europe. According to trade association WindEurope, more capital was invested in Europe's offshore industry in the first half of 2016 than the whole of last year. At the end of July, €14 billion had been invested in projects that will generate 3.7GW of combined new capacity.