The Danish wind energy giant is making news once again after being awarded the contract to build what will be the world’s largest offshore wind farm, the 1,386 MW Hornsea Project Two, at a record UK-low strike price of £57.50 per MWh.
On Monday the UK Department for Business, Energy and Industrial Strategy (BEIS) announced the results of its latest Contracts for Difference (CfD) competitive auction, which has garnered much attention for new record low offshore wind prices that subsequently made offshore wind cheaper than gas and nuclear energy.
Further exploring the importance of this latest UK CfD auction, one of the three offshore wind farms which was successfully awarded a contract was DONG Energy’s mammoth 1,386 megawatt (MW) Hornsea Project Two offshore wind farm which, upon completion, will be the world’s largest offshore wind farm.
DONG Energy is already working on Hornsea Project One, a 1,200 MW offshore wind farm in the North Sea off the coast of England, which it confirmed back in February of 2016. The Hornsea Project Two, which will be located slightly north of Project One, and 89 kilometers off the Yorkshire coast, and is expected to begin operation in 2022, two years after the completion of Project One. Expected to be able to provide enough electricity to power the equivalent of 1.3 million UK homes, Hornsea Project Two will also support up to 2,000 jobs during construction and a further 130 jobs during the 25-year operational life of the project.
“We’re delighted to be awarded a Contract for Difference for Hornsea Project Two, which is another important step towards fulfilling our vision of making offshore wind the most competitive form of electricity generation,” said Samuel Leupold, Executive Vice President and CEO of Wind Power at DONG Energy.
“We have always promoted size as a key driver for cost. The ideal size of an offshore wind farm is 800-1,500MW, and therefore it is natural that Hornsea Project Two will deliver record-low costs to society. At the same time, the low strike price demonstrates the cost saving potential of developer-built offshore grid connections, which in the UK is included in the project scope.”
“This is a breakthrough moment for offshore wind in the UK and a massive step forward for the industry,” added Matthew Wright, Managing Director for DONG Energy UK. “Not only will Hornsea Project Two provide low cost, clean energy to the UK, it will also deliver high quality jobs and another huge boost to the UK supply chain.”
DONG Energy’s massive UK offshore wind pipeline is helping the company achieve ever-greater economies of scale — with the Race Bank and Walney Extension offshore wind farms set to begin operation in 2018, Hornsea Project One in 2020 and Project Two in 2022. The mammoth size of Hornsea Project Two further allows greater cost reduction for construction and operation.
Offshore wind is serving up continual headlines in the UK, and 2017 is likely to be a watershed moment for the industry as it proves its viability up against the UK’s entrenched energy generation technologies such as gas and nuclear (coal being less of a problem in the UK). Continued cost reductions and ever-increasing industry interest in developing offshore wind in the UK has set the industry up for an impressive next few years.
“We’ve placed clean growth at the heart of the Industrial Strategy to unlock opportunities across the country, while cutting carbon emissions,” said UK Minister for Energy and Industry, Richard Harrington. “The offshore wind sector alone will invest £17.5bn in the UK up to 2021 and thousands of new jobs in British businesses will be created by the projects announced today. This government will continue to seize these opportunities as the world moves towards a low carbon future, and will set out ambitious proposals in the upcoming Clean Growth Plan.”
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