Confidence in UK offshore industry illustrated by new £1.3bn project
One of the world's largest offshore windfarms, set to be located off the coast of East England, has secured a £1.3bn long-term financing fund, just six months after it began a fundraising process.
The 402MW Dudgeon Offshore Wind Farm, currently under construction 20 miles off of the North Norfolk coast, is being developed by two Norwegian gas and oil companies Statoil and Statkraft, as well as Abu Dhabi’s renewable energy company Masdar.
“Closing such a significant phase of the project’s development so swiftly illustrates the energy industry’s confidence in the long-term potential of offshore wind, and the increasing sophistication of financing models available to the sector,“ Dudgeon Offshore Wind Limited’s chairman Halfdan Brustad said.
“It is also a testament to the project‘s commercial competitiveness, smooth execution, and the growing investor appetite for utility-scale renewable energy.”
Scheduled for commercial operation by late-2017, the project will deliver 1.7 terawatt-hours (TWh) of electricity each year through its 67 wind turbines – enough to power 410,000 UK homes and displace more than 890,000 tonnes of carbon annually.
The project, which is already midway through construction, became the first offshore windfarm project to obtain partial funding through the UK Government’s Contract for Difference (CfD) scheme, after successfully applying back in May 2015.
Brustad claimed that the project will be a “benefit” the UK’s offshore wind energy industry, by creating more than 70 local jobs during the operational phases, with additional job roles allocated within the supply chain.
Commenting on the funding announcement, RenewableUK’s deputy chief executive Maf Smith said: “This announcement proves that the UK is the go-to destination for offshore wind investors. Big deals like this support thousands of British jobs in every part of the country. Our world-leading offshore wind industry will double in capacity by 2020, driving down the cost of electricity and securing future energy supplies from British waters.”
Winds of warning
Following recent subsidy cuts for solar and other low-carbon technologies, the offshore sector has been bracing itself for a fate similar to its onshore counterpart – which has seen investment stall as a result of political uncertainty. However, last year saw the UK's offshore wind capacity pass 5GW, after the official inauguration of the Gwynt y Mor wind farm off the coast of North Wales.
The potential of the sector – which could see the UK generate more than a third of its electricity demand from offshore wind by 2030, while also supporting 50,000 skilled jobs – has led to the UK’s chief climate envoy Sir David King call for the financial support available for renewable technologies to be pooled towards the UK’s world-leading offshore wind market.