Let’s talk about Contracts for Difference and the latest news for Offshore Wind Projects.
There has been some discussion in the press about CfDs no longer reflecting the true cost of materials in the wake of price increases over the past year, so I thought it would be interesting to look at how they had evolved. Between Round 1 and Round 4 the CfDs have reduced considerably for fixed offshore wind, with strike prices dropping to less than one third of the first allocation.
Round 4 brought about the first CfD for floating offshore wind, heralding the next generation of technologies. The TwinHub demonstration project in the Celtic Sea will receive £87.30/MWh once operational, but how its costs compare to those of its larger, deep-sea cousins remain to be seen.
Given current economics it is interesting to note that the Administrative Strike Prices (ASP) published for Round 5 are lower than those for the previous round. We now await the results this summer with interest.