Orsted and Iberdrola win big in latest UK renewable energy auction
There had been huge pressure for this round to deliver after last year's disastrous edition
The UK today awarded power deals to just over 5GW of offshore wind in its latest renewable energy auction, which saw 9.6GW of green projects awarded contracts in total.
The majority of the 5.3GW of winning fixed-bottom offshore projects came in with ‘strike prices’ of £54.23/MWh at 2012 prices ($71.1/MWh).
The biggest winning developer in the round was Orsted, which clinched more than 1GW of CfD support for its giant Hornsea 3 and 2.4GW for Hornsea 4, both in the North Sea off eastern England.
Iberdrola secured more than 1GW at its East Anglia 2 and 3 projects, while the part-Chinese owned Inch Cape project off Scotland was also successful in securing 266MW.
Ocean Winds' Moray West with 73MW completed the fixed-bottom winners.
Hornsea 4 and East Anglia 2, which both secured a CfD at the slightly higher rate of £58.87/MWh for a total of 3.36GW between them, were the only offshore wind projects not awarded under 'permitted reduction rules', which allow some capacity from previous rounds to be bid into subsequent auctions.
The 400MW Green Volt floating wind project was also a winner at a strike price of £139.93/MWh.
There were 990MW of onshore wind projects awarded at a strike price of £50.9/MWh. Solar saw 3.2GW of projects awarded at a strike price of £50/MWh.
There were also 28MW of tidal stream projects awarded contracts for £172/MWh.
"We inherited a broken energy policy, including last year’s disastrous auction round which gave us no successful offshore wind projects," said energy secretary Ed Miliband in a statement.
"Today we have now achieved a record-setting round for enough renewable power for 11 million homes, essential to give energy security to families across the country. It is another significant step forward in our mission for clean power by 2030 – bringing Britain energy independence and lower bills for good."
There was huge pressure on this auction, known as AR6, to be a success after last year's disastrous edition, which was due to the then-Conservative government setting the administrative strike price (ASP) – the maximum it was prepared to pay for power – too low, at £44/MWh.
Around 10GW of offshore wind projects were eligible to bid for 15-year deals in this year’s auction.
The UK renewables sector has been riding a new wave of optimism following the election of Labour, which has set bold pledges to double onshore wind, triple solar and quadruple offshore wind by 2030. By then, it wants to run a net zero electricity grid.
That quadrupling of offshore wind would represent 60GW of capacity, including 5GW of floating wind.