2019 CfD round signals a better world of energy

I’m very proud that SSE Renewables has been successful in the UK’s third Contract for Difference (CfD) Allocation Round, announced today, and is being awarded 15-year contracts for major new offshore wind projects.

After years of detailed project development and preparation by talented people working across our team and in our project and supply chain partners, we have won contracts for 4GW (SSE share 2.2GW) of low carbon power from our Dogger Bank and Seagreen projects in the North Sea.

Dogger Bank, a joint venture (JV) project with Equinor off the North East coast of England in which SSE Renewables has a 50% stake, has secured three 1.2GW contracts for its total 3.6GW capacity, while the 1,075MW Seagreen Phase 1 project off the Scottish Firth of Forth has secured a contract for 454MW. You can read more about the contract wins here.

At a combined total of just over 2.2GW, this is largest volume of low carbon contracts secured in this round by any developer and indeed the largest ever secured by SSE Renewables, confirming our position as the leading renewable energy developer and operator across the UK and Ireland, and so is cause for huge celebration across our teams. But what’s most important is the green energy that these projects will generate when completed – over 20TWh annually, or nearly 7% of the UK’s current energy demand. That’s a very significant output, demonstrating the crucial role that these offshore projects will make towards low carbon energy supply.

Earlier this year I spoke at an offshore wind energy conference where I said 2019 would be an exciting year for the sector but would also mark the beginning of the next phase for our industry. The Sector Deal was on the horizon, setting us on a new footing to deliver at least 30GW of offshore wind capacity by 2030, and the prospect of this year’sContracts for Difference (CfD) auction provided a route to market for developers to deliver on the UK’s climate action ambitions.

But in the months after, the world moved on. Those ambitions were challenged as not going far enough, as young climate activists took to the streets demanding a new urgency and commitment from our political and business leaders alike to end our reliance on fossil fuels. Strike events, such as those taking place in communities around the world today, prompted governments to act.

Here, the UK Government became the first G7 state to legislate to set net zero as its greenhouse gas emissions target by 2050, and regionally Scotland set a more ambitious target of reaching net-zero five years earlier in 2045. 

The role of offshore wind in achieving these new targets is even more vital now than ever before, and the UK is going to have to fulfil the huge potential of offshore wind in its waters if we are to meet this new net-zero ambition.

At SSE Renewables we believe renewable energy, and offshore wind in particular, is critical to delivering the UK’s net zero targets. While the Offshore Wind Sector Deal sets out the Government’s commitment to holding regular auctions for offshore wind going forward, none of us should underestimate the scale of the challenge that meeting net zero poses.

Looking beyond this Allocation Round, we believe the UK Government must raise its ambition above 30GW of offshore wind by 2030. Only by doing so can the country set itself on the right path towards future carbon budgets and meeting the challenge set by Government to achieve net zero emissions by 2050.

Securing contracts in such a highly competitive auction demonstrates the quality of SSE Renewables’ expertise in the development of renewables. It is an important achievement for our business and our partners, and I would like to congratulate everyone involved in reaching this major milestone.

Disappointingly, however, we were unsuccessful in securing a contract in this round for our onshore Viking Wind Farm project in Shetland. As we outlined in our statement today we remain committed to delivering this project, and are considering how best to take it forward as part of a renewed drive for onshore wind to play its role in supporting net-zero across the UK.

For now, our attention turns to mobilising Seagreen and Dogger Bank towards a final investment decision and construction, working with key stakeholders as well as the wider supply chain. In doing so, we will power the drive forward for a better world of energy and begin contributing to net-zero as soon as possible.

About the author

Jim Smith Managing Director, Renewables

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