SSE secures 2.2GW of new offshore CfD contracts

SSE Renewables is set to be awarded of 15-year contracts in UK’s third Contract for Difference (CfD) Allocation Round for low carbon power from offshore wind at low strike prices.

Dogger Bank Wind Farms and Seagreen Phase 1 have secured CfDs for over 4GW (SSE share 2.2GW) of new renewable energy after a competitive auction. The strike prices of GBP39.65 (US$50)/MWh and GBP41.61 (US$52)/MWh show that offshore wind in particular is now one of the cheapest forms of electricity generation in the UK.

These consented projects will now receive guaranteed revenue for the low carbon electricity they generate for a 15-year period from the 2023/24 or 2024/25 auction delivery year. Outside the 15-year period, they will be an important asset with significant earnings capacity.

The Seegreen Phase I project has been allocated with 454 MW of CfD. It is located in the Firth of Forth off the Scottish coast, Seagreen has a total capacity of 1,075MW across its ‘Alpha’ and ‘Bravo’ projects and is expected to generate around 5,000GWh annually. The CfD contract represents 42% of the total project capacity although SSE Renewables is planning to build out the project to 1,075MW capacity. Wholly-owned by SSE Renewables, Seagreen Phase 1 is at an advanced stage of development and securing a CfD is a significant step in taking the project forward. Plans are in place to progress financing and an equity stake sell-down to move towards a final investment decision in early 2020. SSE Renewables will set out a further project timeline in due course.