After a lackluster 2023, the United Kingdom resumes its leadership in offshore wind.
"Two of the five offshore wind projects that won in AR4 have reached the final investment decision."
The UK's offshore wind sector, after a challenging period due to political missteps and economic stagnation, is witnessing a significant revival.
Aiming to achieve 50 GW of offshore wind capacity by 2030, the UK already boasts 14.7 GW that generate 16% of its electricity. However, the journey has not been without challenges.
Offshore Wind in the UK: Up to 10 GW of New Capacity
The projects from the 4th round of the 2021 Contract for Difference (CfD) auctions faced delays in investment decisions, and the 5th round saw no new project submissions, mainly due to rising costs and the government's failure to fully index auction prices.
Fortunately, the government has course-corrected, increasing the maximum price for the 6th round of CfD auctions by 66%, setting it at £73/MWh. This increase is the main reason for the expected success of this year's CfD auction, with an anticipation of up to 10 GW of new capacity and participation from at least 10 projects.
Notably, 2 of the 5 winning projects from AR4 have finally reached the final investment decision. RWE and Vattenfall have now acquired the entire Norfolk area, containing three authorized wind farms with a total capacity of 4.2 GW. Additionally, Ørsted has commenced the Hornsea 3 project, set to become the largest offshore wind farm in the world, with a capacity of 2.6 GW and the capability to supply energy to 3.3 million British homes. This project is expected to create 5000 construction jobs and 1200 permanent positions.
Offshore Wind: Activation of the Viking Link
Another significant development has been the activation of the Viking Link, the world's longest subsea electrical cable, connecting the UK and Denmark. Currently, it has a capacity of 800 MW, with plans to expand to 1.4 GW. These large interconnectors are crucial for the expansion of offshore wind, allowing for more efficient use of renewable energy and facilitating electricity exchange between different markets.
Giles Dickson, CEO of WindEurope, praised the recent developments in the UK's offshore wind sector, highlighting the correction of past mistakes and anticipating an exceptional auction this year.
These advancements, alongside the efforts of the North Sea countries, signal a promising renewable future for the UK.
