Beatrice Offshore Wind Farm Included In New UK Goverrnment Investment

23rd April 2014

Government unveils eight major new renewables projects, supporting 8,500 green jobs.

SSE welcomes the UK government's announcement that the Beatrice offshore wind farm project has been successful in securing an Investment Contract. The security the contract provides means SSE and its partner Repsol can continue to invest in the the engineering and procurement work required to maintain progress towards a final investment decision in early 2016.

Finlay McCutcheon, SSE's Director of Offshore Renewables, said:"In March we highlighted that we would be focussing our efforts and resources in offshore wind on the Beatrice project. To be able to progress any offshore wind project investors need, amongst other things, clarity over the regulatory framework. Securing an Investment Contract from the UK Government provides the project with this clarity and will enable further investment to continue through 2014. We are therefore extremely pleased with today's announcement.

"However there is still significant additional work to be done before a final investment decision can be made, and we will be working closely with Repsol, and our supply chain partners, to further reduce costs and refine the development and construction programme, with the aim of delivering a commercially viable project in early 2016."

Eight major renewable electricity projects are unveiled as part of the government’s world leading electricity reforms, giving a massive boost to green growth and green jobs.

Eight major renewable electricity projects are unveiled as part of the government’s world leading electricity reforms, giving a massive boost to green growth and green jobs.

By 2020, the projects will provide up to £12 billion of private sector investment, supporting 8,500 jobs, and they could add a further 4.5GW of low-carbon electricity to Britain’s energy mix (or around 4% of capacity), generating enough clean electricity to power over three million homes.

Once built, the successful projects will contribute around 15TWh or 14% of the renewable electricity we expect to come forward by 2020, helping to put the UK well on the way to meeting the UK’s renewable energy target. They will also reduce emissions by 10 MtCO2 per year compared to fossil fuel power generation.

The projects have been offered under Contracts for Difference (CfD), which form part of Government’s world leading Electricity Market Reform programme. They include offshore wind farms, coal to biomass conversions and a dedicated biomass plant with combined heat and power.

Energy and Climate Change Secretary Edward Davey said:“These contracts for major renewable electricity projects mark a new stage in Britain’s green energy investment boom.

“By themselves they will bring green jobs and growth across the UK, but they are a significant part of our efforts to give Britain cleaner and more secure energy.

“These are the first investments from our reforms to build the world’s first low carbon electricity market - reforms which will see competition and markets attract tens of billions of pounds of vital energy investment whilst reducing the costs of clean energy to consumers.

“Record levels of energy investment are at the forefront of the Government’s infrastructure programme and are filling the massive gap we inherited. It’s practical reforms like these that will keep the lights on and tackle climate change, by giving investors more certainty.”

There has been significant growth in renewable electricity sector with the renewables’ share of total electricity generation more than doubling since 2010. We are supporting this growth to continue through Electricity Market Reform and expect to deliver over 30% renewable electricity in 2020.

Today’s announcements, the first step in the new EMR Contracts for Difference regime, will make a significant contribution towards that ambition by, in 2020, delivering around 15TWh - that’s 5% of total electricity generation - from today’s 8 projects alone.

The eight successful projects have been awarded contracts under the Final Investment Decision (FID) Enabling for Renewables process, allocating the first CfDs that are being introduced through the Electricity Market Reform programme. Under CfDs, generators and developers receive a fixed strike price for the electricity they produce for 15 years.

These contracts are vital to give investors the confidence they need to pay the up-front costs of major new infrastructure projects.

The contracts are supported by the new legislative framework introduced through the Energy Act 2013. Further CfDs will be made available in the autumn and the Government intends to publish further details of the allocation process alongside the Government Response to the January Consultation on Competitive Allocation of CfDs shortly.

Together, the successful projects will help provide a secure, affordable supply of electricity and support skilled jobs, boosting growth, supply-chains and businesses across the country.

Projects
Beatrice Beatrice Offshore Windfarm Limited Offshore wind 664MW Outer Moray Firth, Scotland

Burbo Bank extension Dong Energy Wind Power A/S Offshore wind 258MW Liverpool Bay, at the entrance to the River Mersey

Drax Unit #1 Drax Biomass conversion 645MW Selby, North Yorkshire

Dudgeon Dudgeon Offshore Wind Limited Offshore wind 402MW The Wash north of Cromer, Norfolk

Hornsea 1 Dong Energy Wind Power A/S Offshore wind 1200MW North Sea, off the Yorkshire coast

Lynemouth Lynemouth Power Limited Biomass conversion 420MW Ashington, Northumberland

Teesside MGT Power Limited Dedicated biomass with combined heat and power29 9MW Middlesbrough

Walney Extension Dong Energy Wind Power A/S Offshore wind 660MW Irish Sea 19 km WSW off the Walney Island coast in Cumbria

Total 8 4,548MW