A total of 5.3GW of new offshore wind capacity, including 400MW of floating wind, secured CfD in the latest UK wind auction
Recently, the new UK wind auction concluded, awarding a record 6.3 GW of new capacity. Of this, 5.3 GW pertains exclusively to future offshore wind farms.
The result represents a double success regarding the volumes at stake and the market response. The previous British auction had been a failure, unable to secure any offers for offshore wind. The problem? The 2023 auction procedure had set a maximum price cap too low, making potential investments unviable for developers, who were already dealing with various bureaucratic and supply issues.
The new Labour government has thus taken control of the issue, including increasing the maximum price cap by 66% to £73/MWh.
The results were quick to follow. The 5.3 GW of new offshore wind capacity that secured Contracts for Difference (CfD) includes nine fixed-bottom projects (totalling 4.9 GW) and one floating project (400 MW).
The winners include:
- Hornsea 3 (1.1 GW) – Ørsted at an operational price of £54.23/MWh, which will also be the largest offshore wind farm in Europe once operational.
- Hornsea 4 (2.4 GW) – Ørsted at £58.87/MWh.
- East Anglia 2 (support awarded for 963 MW) – Iberdrola / ScottishPower Renewables at £58.87/MWh.
- East Anglia 3 (158.9 MW) – Iberdrola / ScottishPower Renewables at £54.23/MWh.
- Inch Cape A and B (266 MW) – ESB and Red Rock Renewables at £54.23/MWh.
- Moray West Offshore Wind Farm (73.5 MW) – OW Ocean Winds and Ignitis Group at £54.23/MWh.
- Green Volt Offshore Wind Farm (floating) – at £139.93/MWh.
“We have achieved all of this by ensuring good value for money for taxpayers, conducting the largest auction to date at competitive prices, and contributing to our mission for energy independence and clean energy by 2030,” commented Energy Minister Michael Shanks.
But, according to industry associations, there is still room for improvement.
“We are moving in the right direction, and it is a significant improvement over last year’s failed offshore wind auction,” says Giles Dickson, CEO of WindEurope. “Procedures like this also help unlock new investments in the supply chain and are crucial for strengthening the supply chain […] However, the UK needs to secure greater clean energy capacity in each annual auction to meet its targets.”
