The price awarded to the Danish energy giant in the auction carried out by the UK’s Department for Business, Energy & Industrial Strategy (BEIS) was £57.50/MWh.
According to Dong Energy, the strike price is 50% lower than the previous round of CfD auction two years ago which marks a drastic reduction in cost across the offshore wind industry.
The Danish firm says that with the CfD allocation, it has now reached a final investment decision on the Hornsea Project Two offshore wind project located 89km off the Yorkshire coast.
Dong Energy wind power executive vice president and CEO Samuel Leupold said: “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.”
Dong Energy claims that the 1.38GW Hornsea Project Two which will feature up to 300 wind turbines will become the largest wind farm in the world. It will surpass the other Dong-owned 1.2GW Hornsea Project One which is under construction.
Expected to begin operations from 2022, the Hornsea Project Two offshore wind farm will generate enough power to cover the electricity needs of 1.3 million UK homes.
The offshore wind project will create 2,000 roles during its construction phase and a total of 130 permanent jobs through 25 years of its operating lifespan.
Image: The UK government has awarded a 15-year CfD to Dong’s Hornsea Project Two. Photo: courtesy of Crown copyright.
