DANISH developer Dong Energy will build the world’s largest offshore wind farm off the coast of Yorkshire, proposing to produce electricity at a record low cost.
Yesterday’s government auction — at which firms bid for subsidies by offering low “strike prices,” a guaranteed price paid for electricity — resulted in a record-low £57.50 per megawatt hour for the Hornsea Two project.
Experts had predicted a price of about £70 to £80, down from about £115 in February 2015.
Dong called the results of the auction a “breakthrough moment” for offshore wind prices in Britain.
New offshore wind is now cheaper than power from the under-construction Hinkley Point C nuclear power station. Ministers have agreed to pay French firm EDF £92.50 per MWh, plus increases for inflation, for 35 years after the plant starts up in the late 2020s.
Hornsea Two will have a capacity of 1.39 gigawatts — enough to power 1.3 million homes — and will be even bigger than Hornsea One, the 1.2GW wind farm being built now by Dong.
Also approved were the 860MW Triton Knoll wind farm off Lincolnshire and the 950MW Moray East project off north-east Scotland.
Spain’s EDP will be paid £57.50 per MWh for Moray and Germany’s Innogy £74.75 for Triton — a higher price as it will start producing in 2021-22, about a year earlier than Moray and Hornsea Two.
Turbines off the coast of Britain already generate enough electricity to power four million homes and provide employment for 10,000 people.
Yesterday morning, wind power was generating a quarter of Britain’s electricity.
While offshore wind is soaring ahead, the Tories’ cuts to other renewables mean the rest of the sector is lagging behind.
A year after the government slashed solar subsidies in 2015, about half of Britain’s 35,000 solar workers had lost their jobs and several firms had folded.
And the Tories “effectively banned” new onshore wind power — the cheapest of all renewables, at £55 per MWh in 2015 — by scrapping subsidies from April of last year.
In contrast, China, which has made renewables a national priority, recently announced it expects to have 213GW of solar power by 2020 — double its target — and 264GW of wind. Britain’s average usage of electricity is roughly 35GW with peaks of about 50GW.