ScottishPower Renewables has hailed a major breakthrough in efforts to reduce the costs of offshore wind after the East Anglia ONE project successfully secured a Contract for Difference (CfD) in the completive competitive auction process run by the UK Government.
The successful bid was announced today as the shareholders work towards ScottishPower Renewables’ purchase of Vattenfall’s 50% share in East Anglia ONE. Scottis Power Renewables will take the project forward initially as a 714 MW development after winning the auction with a price of £119/MWh.
ScottishPower Renewables, which led East Anglia ONE’s participation in the auction, has been able to bid at a price that is lower than anything previously seen in large scale offshore wind thanks to the engineering, procurement and operational efficiencies that have been introduced in to the project.
The development will see around 100 wind turbines installed in the southern North Sea. The overall investment will be in the region of £2 billion, and the project could meet the annual electricity demands of around 500,000 homes. East Anglia ONE has planning consent for up to 1,200MW, and ScottishPower Renewables may still seek to build out the full project by securing further capacity in future CfD auctions.
The East Anglia ONE project will now be developed solely by ScottishPower Renewables. Vattenfall and ScottishPower Renewables will continue to develop the rest of the East Anglia zone.
“We are delighted to have secured a contract to take East Anglia ONE forward, which will be one the best value offshore windfarms ever developed anywhere in the world,” said Keith Anderson, CEO of ScottishPower Renewables. “It signals a major industry breakthrough in efforts to reduce the costs of offshore wind."
Gunnar Groebler, Head of BU Renewables at
Vattenfall, said: “This is welcome news for East Anglia ONE. It has taken five years to reach this point, since The Crown Estate awarded the lease to Vattenfall and Scottish Power Renewables and almost nine months since being awarded development consent. Now Scottish Power Renewables will take on sole responsibility for delivering EA1 after completing the purchase of Vattenfall’s 50% share in EA1."
Final negotiations will now commence with the wider supply chain, and in the coming months
Scottish Power Renewables will look to secure local port facilities to support the project, as well as agreeing contracts for the major components. Overall investment to deliver the project will be in the region of £2bn, representing an opportunity to create significant UK economic benefit and creating employment opportunities for up to 3,000 people.