Moray West First UK Round 4 Offshore Wind Project To Reach Financial Close
The title of this post, is the same as that of this article on offshoreWIND.biz.
This is the sub-heading.
Moray West Offshore Wind Farm, owned by Ocean Winds and minority shareholder Ignitis Group, has secured GBP 2 billion of non-recourse project finance and reached financial close, the developers announced on 21 April and said this was the first project from the UK’s Contract for Difference (CfD) Allocation Round 4 to reach this milestone.
This is the first paragraph.
The construction work for the wind farm has already started, with this phase of the project set to create 1,000 direct jobs in the UK. With financial close in place, the project will now move to secure the remaining elements of supply chain activity in preparation for offshore installation works later this year which will be fully completed by 2025, when the 882 MW Moray West is scheduled to be fully operational.
That sounds good for Scotland and electricity users in the UK.
But this paragraph is probably the most important.
According to its developers, the 882 MW offshore wind farm is the first in the UK to rely in majority on corporate power purchase agreements (CPPAs) for the commercialisation of its output. CPPAs were signed with long-term strategic partners, for more than 50 per cent of the project’s output, enabling the rapid progress of the project. The vital CPPAs were originated in partnership with ENGIE and represent the largest contracts of their kind implemented in the UK market to date, Ocean Winds said in a press release.
There’s not much point in making something that nobody wants to buy at the price you need for a profitable sale.
But with all those CPPAs, one of which is with Google, Moray West wind farm appears to be on his way.
The Anonymous Widower 
I do wonder if they didn’t have the option to avoid not actualising their CfD, which was struck at £37.35MWh, they would have committed to this project given given cost escalation in equipment and construction materials. In some respect this doesn’t matter if getting more offshore wind was the only goal but Shapps keeps telling us renewables will deliver cheaper electricity as the wind farms will pay the difference to the open market rate which is £110/MWh. They wont if they don’t actualise their CfDs of which Moray East hasn’t already. Reality of course is renewables were never going to be cheap and in some respects the Ukraine debacle has actually helped force the issue that the cost of energy had to go up to make it viable. Still a way to go to get the 50GW offshore wind target by 2030 though.
Comment by Nicholas Lewis | April 24, 2023 |