Jury out over early offshore CfDs

Developers have offered mixed views over the impact of the UK’s announcement last week that seven offshore wind farms are in contention for a possible early Contract for Difference.

Twelve offshore wind projects applied for the so-called Final Investment Decision-enabling process, and seven remain in the running for an early CfD.

Centrica acknowledged that its Round 2 Race Bank was one of the five offshore wind projects that did not make the cut.

Some of the successful bidders, such as Mainstream Renewable Power, indicated that an early CfD would make it easier to reach financial close. Mainstream expects to reach financial close for its 450MW Neart na Gaoithe project in 2014, with construction to begin in 2015.

However, others in the industry simply see the FID-enabling process as something closer to window dressing – a way for the Department of Energy and Climate Change to underscore the attractiveness of the CfD scheme at a time when some developers remain critical.

Recharge spoke to several developers that made the list, but none indicated that the timeline of their projects would be shifted in the event of an early CfD.

“It just means that we've got more certainty about how these projects could work, what [subsidy] regime they would fall under,” said a spokesman for Dong, which saw three of its projects make the cut.

A final decision on which projects will receive an early CfD will likely be made in spring 2014.

The projects which remain in contention for an early CfD are:

Beatrice (SSE/Repsol)

Burbo Bank extension (Dong)

Hornsea zones Njord and Heron (Dong)

Walney Extension (Dong)

Dudgeon (Statoil/Statkraft)

Inch Cape (Repsol/EDPR)

Neart na Gaoithe (Mainstream Renewable Power)