Danish energy company DONG has been awarded a contract to build the world’s largest offshore wind farm in the UK sector of the North Sea.
With a massive capacity of 1,386MW, the Hornsea Project Two offshore wind farm will be capable of producing enough electricity to power 1.3 million homes in the UK. Once fully operational, it will be the world’s biggest wind farm, even surpassing the 1,200MW giant Hornsea Project One which DONG Energy is currently constructing.
The project will also set a record for lowest-ever price for offshore wind in the UK, costing as much as 50% less than similar projects just two year ago.
Hornsea Project Two will be built 89 kilometers from the Yorkshire coast and is to be operated from DONG Energy’s new operations hub in Grimsby, which will be the largest facility of its kind in the UK when built.
DONG said the project will support up to 2,000 jobs during its construction phase, and up to 130 permanent jobs over its 25-year operational phase.
“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.
DONG said that at GBP 57,50/MWh, the strike price for the Contract for Difference (CfD) is 50% lower than the previous round of CfD allocations just two years ago, demonstrating the rapid reduction in cost across the industry.
“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,” Leupold said.
DONG Energy is already constructing Hornsea Project One and has started the consultation process for Hornsea Project Three, underlining the huge potential of this area of the North Sea for offshore wind.
“This is a breakthrough moment for offshore wind in the UK and a massive step forward for the industry,” said Matthew Wright, Managing Director for DONG Energy UK.
“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. Costs are falling rapidly, long-term and highly-skilled jobs are being created across the North of England and the UK supply chain is going from strength to strength. We’re now really seeing the benefits of this commitment to offshore wind and there is still so much more to come. Indeed, it has the potential to play a key part in the realisation of the UK’s industrial strategy,” added Wright.
DONG Energy has invested GBP 6 billion in the UK to date and will reach GBP 12 billion in UK investments by 2020. The company fully or partly owns 12 operational offshore wind projects in the UK.