the same day that Climate Action Strikes are taking place globally, the
Department for Business, Energy & Industrial Strategy (BEIS) has revealed
the successful applicants for the latest round of the Contracts for Difference
(CfD) auction which provides subsidy support for major renewable energy
A total of six offshore wind farm projects were successful in the third
round of the auction which saw the cost of offshore wind drop to around
30% lower than the second auction held in 2017. Projects are now being
delivered for as low as £39.65/MWh.
The successful projects included the Doggerbank
Creyke Beck A
Creyke Beck B
Phase 1 (£41.61/MWh)
(£39.65/MWh) offshore wind farms. The cumulative capacity of these awarded
projects exceeds 5.4 GW.
SSE and Equinor are behind the three Doggerbank projects which will have
a combined capacity of 3.6 GW and are located more than 130 km off the
east coast of UK in the North Sea. The projects are expected to produce
enough energy to power the equivalent of 4.5 million UK homes. The project
partners estimate that the development will trigger a total capital investment
of approximately £9 billion between 2020 and 2026. The partners are planning
for final investment decision for the first project during 2020 and first
power generation is planned for 2023.
SSE is also developing the 454 MW Seagreen
Phase 1 project
located around 27 km from the Angus coastline in Scotland. It is expected
to power around 560,000 households and is the first phase of SSE's Seagreen
offshore wind farm will have a capacity of 1400 MW and cover an area of
almost 600 square kilometres. It is located 165 km off the UK’s North
East coast, on Dogger Bank in the North Sea. The project is expected to
power around 1.2 million homes featuring 200 turbines.
projects is a two turbine demonstration project being developed by Cierco
Ltd. It will feature two new prototype turbines not currently offered in
the marketplace. The demonstration project will be located 1.5 km off of
the northern shore of the Firth of Forth at Methil, Scotland, with the
aim to validate the technical and operational abilities of the new offshore
wind turbine technology on fixed foundations.
Energy and Clean Growth Minister Kwasi Kwarteng commented on the results
of the auction: "Offshore wind is a British success story, with
new projects at record low prices creating new opportunities for jobs and
economic growth as we leave the EU.
The support we’re announcing today will mean that over 7 million more
homes will be powered by renewable energy as we decarbonise our energy
system – crucial as we continue on the road to net zero emissions by 2050."
About the CfD auction
The CfD auction see contracts issued between low carbon electricity generators
and the government owned Low Carbon Contracts Company (LCCC). A generator
is paid the difference between the ‘strike price’– a price for electricity
reflecting the cost of investing in a particular low carbon technology
– and the ‘reference price’, a measure of the average market price for
electricity in the GB market.
The CfD allows developers to secure a fixed, pre-agreed price for the low
carbon electricity they produce for the duration of the contract. It aims
to give greater certainty and security of revenues to electricity generators
by reducing their exposure to volatile wholesale prices, while protecting
consumers against paying for higher support costs when electricity prices
Previous rounds of the Contracts for Difference scheme have seen around
10GW of new renewable power projects awarded contracts in total, with the
potential to provide enough clean electricity for over half a million homes
The first CfD allocation round (AR1) ran from October 2014 to March 2015.
The second (AR2) ran from March to September 2017. Three offshore wind
farms were successful in round 2: Hornsea
Offshore Windfarm (East)
results of round 2 were published on 11th September 2017, and
saw the cost of offshore wind energy in the UK drop by nearly 50%, to £57.50/MWh,
compared to the previous round. This meant offshore wind was cheaper than
the cost of the 35-year contracts for new nuclear power of £92.50/MWh (Hinkley
The UK is currently a world leader with regards to installed offshore wind
capacity with 9.9 GW installed and 3.7 GW in construction or post financial
closure. The government has set a target for ‘up to 30 GW’ of offshore
wind by 2030.
Today's announcement follows news yesterday (19th September 2019) that
Crown Estate has officially launched Offshore Wind Leasing Round 4,
opening up the potential for at least 7 GW of new seabed rights for offshore
wind development in the waters around England and Wales.
For more information on the offshore wind industry in the UK and further