(OE) Dutch state-owned electric grid company TenneT has awarded 11 contracts worth a combined 23 billion euros ($25 billion) to build systems connecting wind farms in the North Sea to shore, it said on Thursday.
The contracts are being awarded to consortia led by Hitachi Energy and by General Electric, and caused shares in Petrofac, part of the Hitachi consortium, to spike as much as 73%.
TenneT is spending tens of billions of euros over the next decade to connect North Sea wind farms to the electric grid in Germany and the Netherlands. Each of the planned links is capable of carrying 2 gigawatts (GW) of electricity, it said.
General Electric said it had been awarded three contracts worth a total of around 6 billion euros in combination with Singapore’s Sembcorp Marine , and two others in a consortium with McDermott International worth another 4 billion euros in total.
The other consortium of Hitachi Energy and London-based Petrofac Ltd said it had signed a 13 billion euro agreement for six projects.
Petrofac said the deal was the largest in its history. Its shares, which had been languishing under the weight of a four-year bribery probe that concluded in October 2021, spiked in early trade and were last up 59%.
The connection systems that TenneT and the companies are planning will convert the alternating current (AC) electricity collected from individual wind turbines to high voltage DC current and bring it to onshore converter stations.
Germany, the Netherlands, Denmark, and Belgium are overseeing projects to build 65 GW worth of offshore wind by 2030 as Europe tries to reduce reliance on fossil fuel and meet climate goals.
TenneT will oversee the grid for about two-thirds of that capacity.
The Dutch and German governments are in talks for Germany to buy TenneT’s German operations in light of the company’s massive investment needs, estimated at over 100 billion euros in the coming decade.