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DONG Energy Awarded Contract to Build World’s Biggest Offshore Wind Farm

Fredericia, Denmark - DONG Energy has been awarded a contract to build its Hornsea Project Two offshore wind farm, at the lowest-ever price for offshore wind in the UK.

At GBP 57,50MWh, the strike price for the Contract for Difference (CfD) is 50% lower than the previous round of CfD allocations just two years ago, demonstrating the rapid reduction in cost across the industry.

With a massive capacity of 1,386MW, enough to power over 1.3 million UK homes, Hornsea Project Two will become the world’s biggest wind farm, even surpassing the 1,200 MW giant Hornsea Project One which DONG Energy is currently constructing. Hornsea Project Two will be built 89 kilometres from the Yorkshire coast and is expected to be operational from 2022.

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’re delighted to be awarded a Contract for Difference for Hornsea Project Two, which is another important step towards fulfilling our vision of making offshore wind the most competitive form of electricity generation.”

“We have always promoted size as a key driver for cost. The ideal size of an offshore wind farm is 800-1,500 MW, and therefore it is natural that Hornsea Project Two will deliver record-low costs to society. At the same time, the low strike price demonstrates the cost saving potential of developer-built offshore grid connections, which in the UK is included in the project scope.”

DONG Energy is already constructing Hornsea Project One and has started the consultation process for Hornsea Project Three, underlining the huge potential of this area of the North Sea for offshore wind.

Facts about Hornsea Project Two Offshore Wind Farm
• Located 89km off the Yorkshire coast
• Total capacity up to 1,386 MW, producing enough electricity to power 1.3 million UK homes
• Expected to be operational in 2022 and will have a life time of 25 years
• Will support up to 2,000 jobs during its construction phase with up to a further 130 permanent jobs for the operational phase of 25 years
• To be operated from DONG Energy’s new operations hub in Grimsby which will be the largest facility of its kind in the UK when built
• The Contract for Difference is a 15-year contract which will be indexed for inflation. After 15 years, Hornsea Project Two will receive the market price for electricity
• Unlike recent offshore wind projects awarded in Germany, Denmark and the Netherlands, the Hornsea Project Two scope will also include the construction of offshore and onshore substations and the transmission cable connecting the turbines to the onshore substation, such assets to be sold to an offshore transmission licensee following construction.

Facts about DONG Energy’s operational offshore wind farms in the UK
• DONG Energy has invested GBP 6 billion in the UK to date and will reach GBP 12 billion in UK investments by 2020
• DONG Energy fully or partly owns 12 operational offshore wind projects in the UK

Source: IWR Online, 13 Sep 2017