Ørsted wins CfD award for 2.9-GW Hornsea 3 offshore project in UK

The 2,852-MW Hornsea 3 offshore wind project of Denmark’s Ørsted A/S (CPH:ORSTED) is one of the winning projects in the fourth allocation round of the UK government’s Contract for Difference (CfD) scheme, the Danish energy major said today.

The contract was awarded at an inflation-indexed strike price of GBP 37.35 (USD 44.6/EUR 43.78) per MWh and will be valid for up to 15 years, with the nominal starting price per MWh to be determined based on the strike price plus accumulated inflation between 2012 and the CfD starting year.

The deal will come into force upon the wind farm’s commissioning, which is scheduled for 2027. After its expiry, Hornsea 3 will receive the market price for its output or will enter into power purchase agreements (PPAs).

Ørsted will install the wind farm and its onshore and offshore transmission assets, including substations and export cables, and divest those assets to a new owner once the complex goes online. The Danish firm expects to take the final investment decision on Hornsea 3 within 18 months and potentially as soon as end-2022.

“We have already secured capacity with key suppliers for around two-thirds of Hornsea 3’s capex,” said CEO Martin Neubert.

Hornsea 3 will be installed 120 km off Norfolk and 160 off the Yorkshire coast in the North Sea as part of a larger complex within the Hornsea Zone with a total capacity of over 5,000 MW. A fourth project, the 2,600-MW Hornsea 4, within the same location is in the planning.

Once in operation, Hornsea 3 is expected to generate electricity for some 3.2 million UK homes.

(GBP 1.0 = USD 1.194/EUR 1.172)

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