Britain is continuing at full speed the plan for the development of renewable energy sources and as part of this effort is preparing nine new gigantic offshore wind farms that will be able to produce enough electricity to supply, according to the country’s authorities, no less than 11 million homes .
These new projects include the construction of Europe’s largest and second largest wind farms, Hornsea 3 and Hornsea 4, which will be located off the coast of Yorkshire.
Britain: Agreement with Orsted – Iberdola
On Tuesday, the new Labor government in Britain signed contracts for these renewable energy sources with the Danish company Orsted and Spain’s Iberdrola after a relevant tender.
In total, the government in Britain is pushing for 131 renewable energy projects, including onshore wind farms, as well as solar and tidal power. Energy group RenewableUK estimates that if all the projects go ahead as estimated, they could attract £14bn, or around €16.6bn, in investment. This is 9.6 gigawatts of renewable energy sources (RES).
Prime Minister Keir Starmer’s government is betting specifically on offshore wind, describing it as “the backbone of the clean energy mission” with the aim of reducing dependence on oil and natural gas in the coming years. Achieving these goals will not be easy but the new government in London appears to be off to a strong start.
The latest round of renewables signings includes nine new offshore wind farms, compared to none last year, including Hornsea 3 and Hornsea 4. It also includes a total of 115 solar and onshore wind projects. Britain’s Department of Energy Security has announced that the new clean energy projects will generate enough electricity to power 11 million homes.
Energy Secretary Ed Miliband credited this latest auction with helping the offshore energy industry get back on its feet, citing projects that “offer energy security to families across the country” (…) “It’s another important step towards forward in our clean energy mission by 2030 – bringing Britain energy independence and permanently lower bills.”
How do auctions work?
The so-called Contracts for Difference (CfC) auctions started in 2015 as a government mechanism to secure the construction of renewable energy projects.
Because renewable energy projects can have very high costs, the companies involved in their development bid to secure a guaranteed price that their project will receive for each megawatt-hour (MWh) of energy it produces over the next few years.
If the price of electricity on the open market falls below this price, subsidies will start to be given to supplement the payments to the companies. If the price is higher, companies must refund the difference.
That auction was completed after the government lifted a de facto ban on onshore wind farms earlier this month, reversing planning measures taken in the country in 2015 by the Conservative government.
Also, this auction follows a recommendation by Great British Energy, Britain’s state-owned energy investment company that will aim to finance 8.3 billion pounds (9.85 billion euros) in renewable energy projects.
