Ørsted Secures Key Contracts for World’s Largest Offshore Wind Projects in UK Energy Auction

Ørsted Secures Key Contracts for World’s Largest Offshore Wind Projects in UK Energy Auction

(IN BRIEF) Ørsted has secured Contracts for Difference (CfDs) from the UK Department for Energy Security and Net Zero for significant portions of its Hornsea 3 and Hornsea 4 offshore wind farms. Hornsea 3, set to become the world’s largest offshore wind farm, and Hornsea 4 will together contribute to the UK’s goal of expanding offshore wind capacity to 60 GW by 2030. The contracts mark a significant milestone in providing large-scale renewable energy to the UK, enhancing the nation’s energy security.

(PRESS RELEASE) FREDERICIA, 3-Sep-2024 — /EuropaWire/ — Ørsted, a global leader in renewable energy, has been awarded Contracts for Difference (CfDs) by the UK Department for Energy Security and Net Zero (DESNZ) for significant portions of its Hornsea 3 and Hornsea 4 offshore wind farms. The contracts, awarded at inflation-indexed strike prices of £54.23 per MWh for Hornsea 3 and £58.87 per MWh for Hornsea 4 (based on 2012 prices), mark a major step forward for these landmark projects.

Hornsea 3, set to be the world’s largest offshore wind farm with a capacity of 2,955 MW, and Hornsea 4, which secured a 2,400 MW CfD, will significantly contribute to the UK’s goal of quadrupling offshore wind capacity to 60 GW by 2030. Ørsted currently operates 12 offshore wind farms in the UK, and the addition of Hornsea 3 and 4 will further bolster its presence in the region, creating a total offshore wind cluster of approximately 8 GW.

Rasmus Errboe, Ørsted’s Deputy CEO and Chief Commercial Officer, expressed satisfaction with the allocation, noting that it represents a crucial milestone for these projects, which will provide large-scale renewable energy to UK consumers and businesses. Duncan Clark, Senior Vice President and Head of UK & Ireland at Ørsted, emphasized the importance of maintaining momentum in the UK’s renewable energy efforts, highlighting offshore wind’s key role in enhancing the nation’s energy security.

Both projects will include the construction of extensive transmission assets, which Ørsted will later divest in accordance with UK regulations. The CfD contracts will run for up to 15 years, after which the wind farms will operate under market conditions or enter new power purchase agreements.

About the projects
Hornsea 3 will be the world’s single largest offshore wind farm with a capacity of 2,955 MW.

Ørsted expects to take FID on Hornsea 4 within the next 18 months and is currently targeting commissioning of the project before the end of 2030.

Ørsted currently operates 12 offshore wind farms in the UK. Hornsea 3 and Hornsea 4 will be Ørsted’s third and fourth gigawatt-scale projects in the Hornsea zone, following Hornsea 1 (1.2 GW) and Hornsea 2 (1.3 GW), which are already being operated out of Ørsted’s operations and maintenance hub in Grimsby. When Hornsea 3 comes online, Ørsted’s Hornsea zone will have a total capacity in excess of 5 GW, making it the world’s largest offshore wind zone covering the power consumption of approx. 5 million UK homes. The addition of Hornsea 4 will create an offshore wind cluster of around 8 GW and unlock further cluster synergies.

About the CfD contracts
The two-way contracts for difference (CfD) for Hornsea 3 run for up to 15 years, starting after commissioning of the wind farm. The strike price is inflation-indexed up to and throughout the CfD period. The nominal starting price per MWh will be determined based on the strike price plus accumulated inflation from 2012 until the CfD starts. After the CfD ends, Hornsea 3 will receive the market price for electricity or enter into new power purchase agreements.

Ørsted will build Hornsea 3 and Hornsea 4 including transmission assets (offshore and onshore substations and export cables). When the wind farms have been fully commissioned, Ørsted will, in accordance with UK regulations, divest the transmission assets to a new owner.

The information provided in this announcement does not change Ørsted’s previous financial guidance for the financial year of 2024.

Media Contact:

Media Relations
Tom Christiansen
+45 99 55 60 17
tomlc@orsted.com

Investor Relations
Rasmus Keglberg Hærvig
+45 99 55 90 95
IR@orsted.com

SOURCE: Ørsted A/S