Offshore wind won 5.5 GW of the 6 GW of new renewable energy capacity awarded in the UK in the world’s largest ever wind energy auction, WindEurope said on 20 September.
According to WindEurope, the average winning price for offshore wind was £40.63/MWh (€46.16/MWh) including grid connection, the lowest prices yet for offshore wind in the UK.
“The cost of offshore wind continues to fall – now to below €50/MWh including grid connection,” WindEurope CEO Giles Dickson said, adding that offshore wind is now the second cheapest form of new power generation in NW Europe – behind onshore wind.
“This auction also confirms the UK’s position as the leader in offshore wind in Europe. They have the largest auction plans: 2GW a year to 2030. They’ve the best auction model, the 2-sided Contract for Difference: requiring wind farms to pay back the difference when the market electricity power exceeds the guaranteed price delivers the lowest overall societal costs,” Dickson said.
The winning bids include 3.6 GW of wind farms at Dogger Bank (by Equinor and SSE) and Innogy’s 1.4 GW Sofia wind farm. Prices for offshore wind in the last UK auction round in 2017 were £57.50/MWh. In 2015 they were £117.14/MWh.
The auction is based on a 2-sided Contract for Difference (CfD) model where the state guarantees wind farms a strike price for their electricity for 15 years, WindEurope said, adding that the wholesale power price is below the strike price the state pays the wind farm the difference. When it’s above, then the wind farm pays the difference to the state.