Offshore windfarm subsidy costs drop to record lows in latest contract round

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The Government estimates that the capacity delivered in this auction will cost consumers, who support their contracts via their energy bills, up to £528m a year less than it would have in the absence of competition.

The government announced that three offshore wind projects were successful, as they put in the lowest bids for contracts for difference.

Also securing contracts in the latest auction for low-carbon subsidies were the 860MW Triton Knoll Offshore Wind Farm, 20 miles off the coast of Lincolnshire and 28 miles from north Norfolk, and 950MW Moray East Wind Farm off the east coast of Scotland.

He said the Government would be setting out ambitious proposals to seize industrial opportunities as the world moved to a low-carbon future, in its forthcoming "clean growth plan" which is due to be published in the autumn.

Factors included the downturn in the oil and gas sector, the availability of larger turbines and a more competitive supply chain. "Not only will Hornsea Project Two provide low cost, clean energy to the United Kingdom, it will also deliver high quality jobs and another huge boost to the United Kingdom supply chain".


He said the industry had shown it could deliver, with more than a quarter of electricity generation now provided by renewables.

Caroline Lucas, co-leader of the Green Party, said the massive price drop for offshore wind should be the "nail in the coffin" for new nuclear.

"Today's results mean that both onshore and offshore wind are cheaper than gas and nuclear". Two very large offshore wind farm developers took £57.50/MWh, one small energy from waste plant operator took £40/MWh.

"The announcement today that the next round of offshore wind projects will receive a strike price of £57.50-74.75/MWh highlights the considerable cost reductions achieved by the offshore wind industry, at the same time as delivering increased United Kingdom content". Hornsea Project Two will contribute significantly to DONG Energy's ambition of reaching a total offshore wind capacity of 11-12GW by 2025. "Successive governments deserve great credit for providing the certainty for continued investment in offshore wind, enabling it to become the thriving renewable industry it is today". Facts about DONG Energy's operational offshore wind farms in the UKDONG Energy has invested GBP 6 billion in the United Kingdom to date and will reach GBP 12 billion in United Kingdom investments by 2020.

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