Subsidies are allocated to a total of 12 new renewable energy projects in the UK's third Contract for Difference (CfD) auction round.
Here, Scottish utility SSE and Norwegian oil major Equinor are subscribed for 3.6 GW of the total 6 GW allocation. The awarded subsidies guarantee a firm price of the first 15 years of the projects' lifecycles.
The two companies have received CfD support for three projects: Doggerbank Creyke Beck A, Doggerbank Creyke Beck B and Doggerbank Teeside A, each rated at 1.2 GW.
Doggerbank Creyke Beck A has secured a strike price of GBP 39.65 per MWh with a deadline between 2023-2024 for the project's first of three phases.
The price for other two projects is GBP 41.611 per MWh with delivery for both in 2024-2025 for their first installation phase.
"The successful bids for the world’s largest offshore wind development represent a game-changer for our offshore wind business and support the development of Equinor as a broad energy company. A full-scale development of Dogger Bank will constitute an industrial wind hub in the heart of the North Sea, playing a major role in the UK’s ambitions for offshore wind and supporting the net zero ambition," writes Equinor Chief Executive Eldar Sætre in statement.
"Excellent wind speeds, shallow waters and scale make Dogger Bank well positioned to deliver low cost renewable electricity to UK homes and businesses," he adds.
The Norwegian oil major expects, however, that the Dogger Bank project will require an investment of approximately GBP 9 billion between 2020 and 2026.
The British government informs in a press release the price of GBP 39.65 per MWh is roughly 30 percent lower for offshore wind that at the last CfD round in 2017.
"Seizing the opportunities of clean energy not only helps to protect our planet, but will also back businesses and boost jobs across the UK,” UK Prime Minister Boris Johnson says, as cited by Reuters.
Innogy wins 1.4 GW
Equinor and SSE are, however, not CfD3's only winners.
German utility Innogy has also won aid for its Sofia project, which previously went by the name of Dogger Bank Teesside B.
The energy company has secured subsidies for 1.4 GW at a price of GBP 39.65 per MWh. The project's first phase is projected to enter operation in 2023-'24 and will consist of up to 200 wind turbines, Innogy informs.
More to SSE
SSE has even more to celebrate. Beyond having gained support for 3.6 GW in a joint venture with Equinor, the utility has also won aid for its Seagreen Phase 1 project.
This is taking place through the company Seagreen, which SSE purchased from its JV partner Fluor Ltd. back in 2018.
Seagreen Phase 1 is awarded 454 MW for a price of GBP 41.611 per MWh.
One week ago, SEE informed that it sold its distribution business. The sale was meant to, among other things, allow the utility to boost its focus on renewable energy.
SSE's current portfolio includes almost 2 GW of onshore wind, while the company has around 1 GW in offshore wind capacity in facilities including the 588 MW offshore wind farm Beatrice.
SSE has previously urged the UK to increase auctioned capacity in the coming CfD round.
SSE CEO Alistair Phillips-Davies argued that the UK's carbon-neutrality target for 2050 was incommensurable with a volume cap on offshore wind.
The recommendation appeared in an open letter addressed to Department for Business, Energy and Industrial Strategy (BEIS) Minister of State Chris Skidmore, and the SSE CEO urged that the third CfD round's 6 GW cap be raised.
The last offshore wind project to have won CfD support is Forthwind, under development by US-based Cierco, which won subsidies for 12 MW for a price of GBP 39.65 per MWh. The project entails "two new prototypes or 'pre-commercial' wind turbines."
Altogether, offshore wind subscriptions tally to 5.466 GW, while wind projects on remote islands subscribe for 275.22 MW, and the final technology, advanced conversion, accounts for 33.6 MW.
English Edit: Daniel Frank Christensen
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