The Department for Business, Energy and Industrial Strategy (BEIS) has called on companies to act “fairly”, as Moray East Offshore Wind farm moves to delay taking up its Contracts for Difference (CfD) support.
Moray East Offshore Wind farm – which has been developed as a joint venture owned by Ocean Winds (56.6%) Diamond Green Limited (33.4%) and CTG (10%) – secured a CfD contract for 950MW of generation at a set price of £57.50 per MWhr in 2017.
The wind farm was fully commissioned last month, having initially started generating electricity back in June 2021 when the first of its 100 Vestas V164-9.5 MW turbines were installed.
When the final turbine was installed in September, the company highlighted that power from the wind farm will provide the lowest cost of any renewable generation, with its strike price 2/3x less than the cost of power from wind farms in operation at the time, which sat typically upward of £140/MWhr.
Once the wind farm takes up the CfD, as well as being guaranteed the strike price, it will have to pay back upside. This means it would be unable to take advantage of the current high power prices in Britain, which have been at record high levels throughout the beginning of 2022.
For example, analysis from the Energy and Climate Intelligence Unit in March suggested the CfD scheme will pay back £660 million between October 2021 to April 2023.
“The Contracts for Difference scheme has been hugely successful in boosting UK energy supply and reducing our dependence on volatile fossil fuels, while also cutting costs for consumers, reducing the price of offshore wind by around 65% since 2015,” a BEIS spokesperson told Current±.
“Projects will not receive Contracts for Difference payments while they are generating on market terms. We urge companies to act fairly on this matter, recognising the public support they have received for development.”
By 2027, CfD-supported renewables could pay back £10.49 billion a year to customers, according to a report from thinktank Onward, as further projects come online.
From November 2021 to January 2022, CfDs paid back £114.4 million to energy suppliers, the report stated, which is equivalent to each household saving £6.46.
The decision to wait to trigger CfD support for the Moray East Offshore Wind falls within the rules of the scheme.
In a statement, Moray East Offshore Wind farm said: “Moray East is proceeding according to plan within the terms set by the CfD process”.