A broad range of groups have welcomed the results of the second Contracts for Difference (CfD) auction, which showed a significant fall in the cost of offshore wind and other technologies. Responding on Monday 11 September, RenewableUK highlighted that the cost of offshore wind was now cheaper than new nuclear and the levelised cost of new gas generation. RenewableUK’s Chief Executive Hugh McNeal commented “this young, ambitious industry can go even further. The government can help us by continuing to hold fiercely competitive auctions for future projects”. Lawrence Slade, Chief Executive of Energy UK, echoed this call, urging the government to set out “an ambitious, long-term plan for further decarbonisation in the Clean Growth Plan, as well as providing certainty around the timing for further auctions”.
The big winner is offshore wind as it receives contracts to deliver 3196MW. The strike price achieved was £57.50MW for 2336MW and £74.75 for 860MW. We can see the reduction in the Hornsea 2 project for 1386MW at £57.50 compared to its 2014 Hornsea 1 project which achieved a strike price of £140.00MW.
2 other technologies have been awarded CfD contracts. Advanced Conversion Technologies (broadly energy from waste technology) 64.31MW with a strike price of £74.75MW for 56.31MW and 8MW at £40.00MW. Dedicated Biomass with CHP will supply 85.64MW at £74.75MW.
All projects are for delivery in the 2021/22 and 2022/23 timeframe and will contribute to the non-commodity charges on your electricity bills. As always they will be built into your budget forecast.
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