NEWS / Infrastructure Intelligence / Record-breaking CfD auction boosts 131 clean energy projects

Ørsted's Hornsea 1 project - image: Ørsted

04 SEP 2024

RECORD-BREAKING CFD AUCTION BOOSTS 131 CLEAN ENERGY PROJECTS

Millions of homes and businesses across Britain will be powered by a new supply of clean, homegrown energy as a record number of projects have received funding through the government’s most successful renewables auction to date.

The Contracts for Difference (CfD) Allocation Round 6 has given support to 131 new green infrastructure projects.

This makes it the biggest round ever with significant numbers for onshore wind, solar and tidal energy, which will power the equivalent of 11 million British homes.

The results are a marked improvement on the previous auction round in 2023, which saw zero offshore wind projects agreed.

The government announced in July that the budget for this year’s renewable energy auction was being increased by £500m to more than £1.5bn - a record budget - helping build new green infrastructure as part of the mission to deliver clean power by 2030.

Industry has bid for a share of the funding through the government’s sixth renewable auction.

The Contracts for Difference scheme works by developers bidding for contracts to help deliver renewable energy projects, with the scheme providing a guaranteed price for the clean electricity they generate. This gives industry greater certainty to invest, knowing that when electricity prices fluctuate, they will always get a set price for their projects.

The auction results have seen a boost for offshore wind, with nine contracts awarded including securing both what will be Europe’s largest and second largest windfarm projects, Hornsea 3 and Hornsea 4 off the Yorkshire coast.

Energy Secretary Ed Miliband said: “We inherited a broken energy policy, including last year’s disastrous auction round which gave us no successful offshore wind projects.

“Today we have now achieved a record-setting round for enough renewable power for 11 million homes, essential to give energy security to families across the country. It is another significant step forward in our mission for clean power by 2030 – bringing Britain energy independence and lower bills for good.

“These results show that together, this government and the energy industry are securing investment into our country.”

The 131 projects this year exceeds the 92 projects delivered in the last auction round.

This year's winners include:

  • The largest offshore windfarm project in Europe - the Hornsea 3 project off the Yorkshire coast, being developed by Ørsted.
  • The largest floating offshore wind project in the world to reach market, Green Volt, which is double the size of Europe’s total installed floating offshore wind capacity.
  • Six new tidal projects, building on the UK’s world leading position, with just under half of the world’s operational tidal stream capacity being situated in UK waters.
  • A combined 115 solar and onshore wind projects, which is more than the total number of projects delivered in the last auction round

The auction has awarded Ørsted CfD for a 1,080 MW share of the Hornsea 3 Offshore Wind Farm, as well as a 2,400 MW CfD for Hornsea 4.

Duncan Clark, senior vice president and head of UK and Ireland at Ørsted, said: “The important takeaway from this allocation round is that progress is being made, and it’s crucial that this momentum continues to grow.

“The government has shown it takes renewable energy seriously, and we’re confident it will continue working with the sector to increase the volume of projects deployed in the UK.

“Offshore wind is key to the nation’s energy security and remains one of the most attractive forms of energy generation, offering low-cost, highly scalable electricity to UK bill payers. Ørsted and the wider industry stands ready to deliver with a substantial pipeline of developments.”

The auction results have also been welcomed by renewable energy trade association RenewableUK.

Chief executive Dan McGrail said success of the auction sent out a clear signal that “the UK is back in the global race for clean energy investment”.

“This wide range of projects, across technologies, are vital steps in building a clean, affordable energy system and reducing our dependence on expensive fossil fuels,” he added.

“After the failure of last year’s offshore wind auction, it was essential that this auction succeeded and the fact that nine major offshore wind projects have secured contracts will increase investor confidence.

“There is intense global competition in offshore wind and the next auctions will be crucial for the UK.

“The government has set a world-leading clean power mission for 2030 and to meet that will need a big step-up from today.

“The industry stands ready to work with government to make sure that we’re increasing the amount of new renewables coming through each year to the levels needed to meet the clean power mission”.

Click here for the full list of Contracts for Difference Allocation Round 6 results.

 

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