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R-UK lauds ‘astounding’ CfD2

UPDATE: WindEurope calls for more offshore ambition in Europe

R-UK lauds ‘astounding’ CfD2  image

RenewableUK described the results of the second UK Contract for Difference (CfD) auction as “astounding” for the offshore wind sector.

The strike prices awarded to the three projects are on average 47% lower for offshore wind than in the first CfD auction in 2015, R-UK said.

The UK government today awarded contracts priced at £57.5 per megawatt hour for the almost 1.4GW Hornsea 2 and 950MW Moray 1 projects off Yorkshire and Scotland respectively and £74.75/MWh for Triton Knoll off Lincolnshire.

The renewables industry body said the results mean offshore wind is cheaper than new nuclear power and the levelised cost of the natural gas, based on BEIS figures.

R-UK chief executive Hugh McNeal said: “We knew today’s results would be impressive, but these are astounding. 

“Record-breaking cost reductions like the ones achieved by offshore wind are unprecedented for large energy infrastructure.”

He added that the government could help the offshore wind sector reduce costs further by “continuing to hold fiercely competitive auctions for future projects, as it has promised, and by putting offshore wind at the heart of its upcoming Industrial Strategy”.

Greenpeace said that the auction result means offshore wind is now the lowest cost option for large-scale, low-carbon power.

Greenpeace head of energy Hannah Martin said: “This record breaking price drop from offshore wind marks a huge moment for the UK energy sector. The price of offshore wind power is 50% cheaper than just two years ago, this means we are witnessing a revolution in UK energy.”

Renewable Energy Association head of policy and external affairs James Court said: “These results show that renewables are now the most cost effective form of any energy generation which can future proof both the UK grid and provide sustainable new jobs in the UK.

“Offshore wind’s success shows what can happen with government support, and consider that this auction was for so called ‘less established’ technologies, with the more mature onshore wind and solar blocked to market.”

Offshore Renewable Energy Catapult chief executive Andrew Jamieson said: “The auction results are further evidence of the huge progress the industry has made in substantially cutting costs through innovation, creating thousands of UK jobs.

“We look forward to continuing to support businesses of all sizes to accelerate innovation, driving ever increasing quantities of UK content as capacity increases and costs continue to fall, and ensuring that offshore wind becomes the backbone of the UK’s future energy systems.”

WindEurope chief executive Giles Dickson said: “In light of these latest price reductions, we call on the UK and other European governments to make ambitious commitments on future deployment volumes for offshore wind. 

“To sustain these cost reductions the industry needs to be able to plan ahead, especially for the period post-2020 – crucially it needs at least three years’ visibility on the timing and volume of auctions.”

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