On Friday, DONG Energy awarded Siemens (NYSE:SI) a $2.55 billion supply contract for up to 500 offshore wind turbines.. The state-controlled oil and natural gas group will use the turbines for their new offshore wind farms in Northern Europe.

While DONG is well-known for its oil and natural gas production from the North Sea, the company is also a leading offshore wind developer, with 369 megawatts currently in operation, and another 808 megawatts in development. Overall, roughly 60 percent of DONG's capacity comes from offshore wind farms in Denmark and the UK.

Today, there are 16 offshore projects in operation, and all can be found in Denmark, Holland, Sweden, and the UK. Here in the United States, there are a number of offshore wind farms now in development. In fact, just a couple of months ago, Rhode Island Governor, Donald Carcieri announced the construction of a new offshore wind farm that will generate about 1.3 million megawatt hours per year. That's enough to cover 15 percent of the ocean state's energy use. As well, the new projects will create up to 800 jobs with annual wages of $60 million.

Of course, these offshore wind farms are not cheap, as the capital costs can be significantly higher than those wind farms you might see in western Maryland or Palm Springs, CA. But in an effort to find a more consistent wind resource, developers will continue to embrace offshore projects. After all, according to the Department of Energy, there's enough potential wind energy off the coast of the United States to cover nearly all the current installed U.S. And the best part is, you don't have to mine or transport the resource.

Jeff