British operator and owner of renewable energy assets SSE Renewables announced that it has won UK’s third Contract for Difference (CfD) Allocation Round and is set to be awarded 15-year contracts for low carbon power from offshore wind at record low strike prices.
Dogger Bank Wind Farms and Seagreen Phase 1 have secured CfDs for over 4GW (SSE share 2.2GW) of new renewable energy after a highly competitive auction. The strike prices of £39.65/MWh and £41.61/MWh show that offshore wind in particular is now one of the cheapest forms of electricity generation in the UK.
These consented projects will now receive guaranteed revenue for the low carbon electricity they generate for a 15-year period from the 2023/24 or 2024/25 auction delivery year. Outside the 15-year period, they will be an important asset with significant earnings capacity.
Today’s results enhance SSE Renewables’ position as the leading renewable energy company across the UK and Ireland. Once completed these projects will generate over 20TWh of green energy annually, equivalent to nearly 7% of the UK’s current energy demand, making a significant contribution to the UK’s net zero climate change targets and contributing to SSE Renewables’ goal of trebling renewable energy output by 2030.
Jim Smith, Managing Director of SSE Renewables, said: “I’m very proud SSE Renewables has been awarded contracts to deliver new renewable energy from offshore for the UK. These are by far the largest volume of low carbon contracts awarded in this CfD auction round and the biggest ever secured by SSE Renewables, confirming the company’s position as the leading developer and operator of renewable energy across the UK and Ireland. Working with our project partners as well as the wider supply chain, we will now turn our focus in the months ahead to mobilizing Seagreen and Dogger Bank towards financial close and construction.
“Achieved at record low prices with no additional cost to the consumer above forecast wholesale prices, these contract awards demonstrate the value for money that new renewable generation, and these projects in particular, represent to UK energy customers.
“Our success in this highly competitive auction strengthens our position as the leading developer, owner and operator of offshore and onshore wind across the UK and Ireland. It is an important achievement for our business and our partners, demonstrating our expertise in renewables development, and I would like to congratulate everyone involved in reaching this major milestone.
“Looking beyond this Allocation Round, we believe the UK Government must raise its ambition above 30GW of offshore wind by 2030. Only by doing so can the country set itself on the right path towards future carbon budgets and meeting the challenge set by Government to achieve net zero emissions by 2050.”