Stage set for CfD2 reveal

The results of the UK’s second Contracts for Difference (CfD) auction will be published on Monday, with offshore wind tipped to be the big winner.

BEIS will announce the winners of the 15-year contracts from the so called Pot 2 auction that is offering subsidies worth £295m per year.

Dong Energy’s 1.8GW Hornsea 2 and Innogy and Statkraft’s 900MW Triton Knoll off Yorkshire and Lincolnshire respectively, as well as EDPR and Engie’s 1.1GW Moray 1 off Scotland are all in the hunt.

Industry experts predict up to 3GW of offshore wind could secure CfDs with winning bids of between £60 and £70 per megawatt-hour expected.

Other renewable technologies, such as biomass and tidal stream, are understood to have bid in the CfD2 auction but many doubt their competitiveness in a straight fight with offshore wind.

“Something could sneak in but unless biomass and tidal bid down to around £70/MWh they end up breaking the bank if they get in,” said Inflection Point Energy Consulting director Gordon Edge.

RenewableUK is predicting a significant fall in the cost of offshore wind when the CfD2 results are unveiled next week. 

The renewable energy sector expects that the cost of offshore wind will be significantly lower than that of new nuclear power.

RenewableUK executive director Emma Pinchbeck said: “Offshore wind is now an industrial powerhouse for the UK. 

“The industry has achieved record-breaking cost reductions and is pouring over £11.5bn over the next four years into our seaside towns and businesses across the UK. 

“Monday’s auction results could be a watershed moment for the UK offshore wind sector. The offshore wind sites that win on Monday will be a catalyst for our future economy and will provide cheap, clean electricity for UK consumers.” 

Stay tuned to reNEWS.biz on Monday for live coverage of the CfD2 results.

Image: reNEWS