CfD support awarded at £57.50/MWh for UK offshore wind projects

The UK Department for Business, Energy & Industrial Strategy (BEIS) has published the outcome of the April 2017 Contracts for Difference (CfD) allocation round for less established renewable technologies at the lowest-ever price for offshore wind in the UK. The new prices reached a new record in the UK offshore wind industry and also came in significantly lower than the £92.50/MWh subsidy rate which was awarded to France’s EDF in 2012 to build the Hinkley Point C project.

The government has awarded two CfDs at £57.50/MWh (€64.10/MWh) to two offshore wind parks scheduled for 2022-2023 and a £74.75/MWh (€86/MWh) CfD to one offshore wind park project planned for 2021-2022. The CfDs are 15-year contracts which are indexed on inflation. Once this time has elapsed, the projects will receive the market price for electricity. The current £57.50/MWh price is 50% lower than the previous round of CfD allocations which occurred just two years ago. The three largest facilities which were included in this allocation round are expected to have a combined capacity of 3,200 MW and include namely the Dong Energy's 1,386 MW Hornsea-2, EDPR/Engie's 1,116 MW Moray East and Innogy/Statkraft's 860 MW Triton Knoll projects.

The 1,386 MW Hornsea-2 wind park project is located 89 km from the Yorkshire coast (England) and will be built at £57.50/MWh. It is scheduled to be operational in 2022-2023 and will have a life time of 25 years. Dong Energy is the operator of the project.

EDP Renovaveis (EDPR, with a 76.7% interest) and Engie (23.3%) will build the 1,116 MW Moray Offshore Windfarm East project, of which 950 MW will be covered at a rate of £57.50/MWh. The wind park will be located over 22 km off Scotland's east coast and is also scheduled for completion in 2022-2023. Moray East was the first part of the Moray Firth Zone to be developed, and the first of the Round 3 projects to apply for and receive consent from the Scottish authorities in 2014.

The 860 MW Triton Knoll offshore project is scheduled for 2021-2022 and will be constructed at £74.75/MWh. RWE Innogy and Statkraft both hold a 50% stake in the project. The facility will be located approximately 32 km off the Lincolnshire coast and 50km off the coast of North Norfolk (England, UK).

Source: Enerdata

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