Dong Energy has been awarded a contract to build its Hornsea Project Two offshore wind farm by the U.K. government, one of three awards made on Monday.
With a capacity of 1,386MW, enough to power over 1.3 million U.K. homes, Hornsea Project Two will become the world’s biggest wind farm, surpassing the 1,200MW giant Hornsea Project One which Dong Energy is currently constructing. Hornsea Project Two will be built 89 kilometers (55 miles) from the Yorkshire coast and is expected to be operational from 2022 for 25 years.
Hornsea Project Two will contribute significantly to Dong Energy’s ambition of reaching a total offshore wind capacity of 11-12GW by 2025. Samuel Leupold, Executive Vice President and CEO of Wind Power at DONG Energy, says: “We have always promoted size as a key driver for cost. The ideal size of an offshore wind farm is 800-1,500MW, and therefore it is natural that Hornsea Project Two will deliver record-low costs to society.”
Operations and maintenance on both Hornsea projects will be conducted from Dong Energy’s new hub in Grimsby, which also serves other Dong Energy offshore wind farms on the U.K. east coast.
Dong Energy has already started the consultation process for Hornsea Project Three.
The U.K. Department for Business, Energy and Industrial Strategy announced two other successful bids on Monday: Innogy and Statkraft’s Triton Knoll off the coast of Lincolnshire, and EDPR’s Moray off the northeast coast of Scotland. The new wind farms, with a total capacity of 3,196MW, will power the equivalent of more than 3.3 million homes.
The cost of offshore wind has plummeted since the last competitive auction in February 2015, with the new prices on average 47 percent lower. They are also are cheaper than the cost of the 35-year contracts for new nuclear power of £92.50 ($122) per megawatt hour, and cheaper than the levelized cost of gas. Hornsea 2 and Moray will begin generating at £57.50 ($75.84) per megawatt hour and Triton Knoll at £74.75 ($98.59) per megawatt hour, with prices guaranteed for 15 years.
Welcoming the awards, RenewableUK’s Chief Executive Hugh McNeal said: “Record-breaking cost reductions like the ones achieved by offshore wind are unprecedented for large energy infrastructure. Offshore wind developers have focused relentlessly on innovation, and the sector is investing £17.5 billion into the U.K. over the next four years whilst saving our consumers money.
“The results are further proof that innovation in the offshore wind industry will bring economic growth for the U.K. on an industrial scale. The U.K. needs to establish new trading opportunities as we leave the European Union, and the U.K.’s offshore wind sector is a world leader in a global renewable energy market currently worth $290 billion a year.”