Two of the world’s leading offshore wind farms currently under construction have taken another major step forward after passing a required milestone under the UK’s Contracts for Difference scheme for low carbon power.
The 3.6GW Dogger Bank Wind Farm and the 1.1GW Seagreen Offshore Wind Farm, both of which are being constructed by SSE Renewables in the North Sea, were each awarded 15-year CfD contracts for low carbon power in the UK’s third CfD Allocation Round in September 2019.
Each of the three phases of the giant Dogger Bank Wind Farm project secured a CfD for 1.2GW of low carbon power production, while Seagreen secured a CfD for 454MW ahead of reaching Final Investment Decision in June 2020 to build out to 1,075MW capacity. Under the CfD process each successful wind farm must pass certain milestones in order to receive their respective contracts.
Now, the UK’s Low Carbon Contracts Company (LCCC) which administers the CfD scheme has confirmed that both the Dogger Bank and Seagreen projects have each successfully passed key CfD milestone requirements.
These require developers whose projects are in receipt of a CfD to demonstrate their commitment to delivering the project by:
- incurring actual spend equal to 10% of the expected development and construction costs; or
- by evidencing project commitments, including that financing is in place for the project and contracts are entered into for the manufacture and installation of material equipment for the generation and export of electricity.
The Dogger Bank and Seagreen offshore wind farm projects were among four UK-based developments to achieve the CfD milestone with the LCCC from the third allocation round.
Paul Cooley, Director of Capital Projects at SSE Renewables, said: “At SSE Renewables we’re building more offshore wind energy than any other company in the world right now. So, we’re delighted that we’re continuing to make good progress on the development and construction of our two flagship offshore wind projects, Dogger Bank and Seagreen. Confirmation from the LCCC that both of these projects have passed their first CfD milestone requirements demonstrate that project delivery for each wind farm is well on-track, and that we’re on-target for Seagreen to become Scotland’s largest and the world’s deepest-tethered offshore wind farm and for Dogger Bank to become the world’s single largest offshore wind farm when each is completed.
“As we mark and celebrate these important CfD milestones from Round 3 for our construction projects, we also look forward with ambition and commitment at what we need to do to be able to deliver the 5GW of new offshore wind projects in our development pipeline portfolio that will go forward for future CfD rounds. These include our Berwick Bank and Marr Bank projects which together have the potential to deliver up to 4GW of installed capacity, making them capable of becoming Scotland’s largest offshore wind farms. That’s why we’ll continue to work together with the UK and Scottish government and regulators to help accelerate investment in vital grid infrastructure and speed up the consenting process for offshore wind so that we can ensure the UK remains on course to achieve its target of 40GW of offshore wind by 2030.”
Neil McDermott, LCCC Chief Executive, said: “Allocation Round 3 projects faced challenges on an unprecedented scale due to the impacts of a Judicial Review, uncertainty around EU Exit, and the global pandemic. I’m incredibly proud to see these projects pass this important milestone and I commend the determination and teamwork that went into achieving it.
“The projects include some of the world’s largest offshore wind farms to date, so this outcome demonstrates the CfD’s vital role in supporting new low-carbon power projects to secure investment and, ultimately, in developing the ambitious infrastructure we need to power the UK’s transition to Net Zero emissions by 2050.”
The three phases of the Dogger Bank Wind Farm will have a combined installed generation capacity of 3.6GW, enough to power six million UK homes. When complete in 2026, it will be the world’s biggest offshore wind farm. The 2.4GW Dogger Bank A and B is a joint venture between SSE Renewables (40%), Equinor (40%) and Eni (20%).
The A and B phases of the Dogger Bank Wind Farm reached financial close in November 2020 at competitive terms underlining the attractiveness of the UK offshore wind assets and the confidence in the joint venture. The 1.2GW third phase of the wind farm, Dogger Bank C, is a 50:50 joint venture between Equinor and SSE Renewables and is being developed under a different timeline. SSE Renewables is leading on the construction and delivery of all three phases of Dogger Bank Wind Farm. Equinor will operate Dogger Bank Wind Farm on completion.
The 1,075MW Seagreen project is located 27km off the coast of Angus in the North Sea and is a £3bn joint venture between Total (51%) and SSE Renewables (49%).
Seagreen will be Scotland’s largest and deepest offshore wind farm when complete. SSE Renewables is leading the development and construction of the joint venture project, supported by Total, and will operate Seagreen on completion. First power is expected by early 2022 with the offshore wind farm expected to enter commercial operation in 2022/23.