Vattenfall Exploring 'all options' for UK Offshore Wind Projects
Posted 07/09/2023 13:53
Swedish energy company Vattenfall is reassessing its approach to offshore wind projects off the Norfolk coast in the United Kingdom after suspending work on one of them earlier in the year due to escalating costs.
Vattenfall paused the development of its 1.4-gigawatt Norfolk Boreas wind farm in July, even though it had secured a contract-for-difference (CfD) in a UK auction in 2022. The CfD guaranteed a minimum price of £37.35 per megawatt-hour (MWh) for electricity produced, equivalent to roughly £45/MWh at today's prices. The British CfD scheme, initiated in 2014, provides renewable energy developers with a guaranteed electricity price.
The Norfolk Boreas project was part of Vattenfall's larger Norfolk Offshore Wind Zone development, which also includes the 2.8-gigawatt Norfolk Vanguard project, where work continues.
Vattenfall is currently exploring various options for advancing these projects as originally consented. However, the company remains committed to the development of the Norfolk Offshore Wind Zone, which aims to supply low-cost, clean power to millions of UK homes and businesses.
While specific options, such as a potential sale of the projects, were not commented on, the spokesperson highlighted that under British rules, it is not possible to renegotiate a CfD contract once the auction round has concluded and been signed. Nevertheless, following a default, a project becomes eligible to participate in future auction rounds, excluding the one immediately following the default.
The UK is currently conducting its fifth CfD auction round for renewable energy projects, including offshore wind, with results expected to be announced soon. Rising costs have also put pressure on offshore wind projects in other markets, particularly in the United States, where several developers have suspended projects or sought improved terms for power sale agreements.