Power purchase agreements for the first two stages of what will be the “world’s largest” offshore wind farm have been given the green light.
SSE Renewables and Equinor, the joint venture partners co-developing the 3.6 gigawatt (GW) Dogger Bank wind farm in the North Sea, claim the move represents one of the “final milestones” that brings the project closer to financial close.
Separate PPAs for a total of 2.4 GW have been signed with Danish energy giant Ørsted and oil and gas major Shell, which have taken 40% and 20% respectively.
Equinor’s “power trading arm” Danske Commodities has also taken a 20% share, while SSE Energy Supply Limited has taken the remaining margin.
The agreements, which follow the conclusion of a competitive bidding process, are subject to financial close on Dogger Bank A and Dogger Bank B, which is expected in the near future.
It means that power generated by the first two phases of the development will be able to be sold into the UK’s electricity market.
Combined they are thought to represent the largest set of PPAs completed to date in a tender process for a renewable energy project in the UK market.
Ørsted will have trading and balancing responsibility for 960 MW, while Shell, SSE and Danske Commodities will have responsibility for 480 MW each of installed generation capacity across Dogger Bank A and B.
Steve Wilson, Dogger Bank wind farm’s project director at SSE, said: “Today’s announcement that we have concluded offtake Power Purchase Agreements for Dogger Bank A and B marks one of our final milestones ahead of reaching financial close soon for what will be the world’s biggest offshore wind farm.
“These agreements with leading energy trading companies will ensure the renewable energy generated by the first two phases of Dogger Bank wind farm can be sold into the GB electricity market, delivering on our promise to power millions of British households with green energy.”
Halfdan Brustad, vice president for Dogger Bank at Equinor, said: “We are delighted to announce offtake agreements for Dogger Bank A and B. Despite the current global challenges, the project is really moving forwards and this tangible milestone brings us one step closer to Financial Close.
“Large-scale renewable energy projects like Dogger Bank are not only crucial for the UK to reach its net zero ambitions, the project will bring many economic benefits to the UK in terms of jobs and supply chain opportunities. We are proud to be contributing to a just energy transition and supporting the Government’s 10 point plan for a green industrial future.”
Due to its size and scale, the development is being built in three consecutive 1.2GW phases; Dogger Bank A, Dogger Bank B and Dogger Bank C.
Each stage is expected to generate around 6 terawatt-hours of electricity annually.
Dogger Bank secured 3.6 GW of offshore wind contracts in the UK Government’s 2019 Contracts for Difference (CfD) auctions.
The award provides overall price certainty to each stage of the wind farm for a period of 15 years.
The offtake PPAs announced today for the first two phases cover the 15-year term from the start of the CfDs awarded to each project.
They provide a route to sell the green energy generated by both wind farms into the National Grid when they each enter operation.
Construction work on Dogger Bank, which is located over 80 miles off England’s north-east coast, got underway earlier this year.
Turbine installation for the first phase of the project is scheduled to begin in 2023.
Dogger Bank will be capable of powering up to 4.5 UK million homes each year when fully complete in 2026.
Morten Buchgreitz, executive vice president and chief executive of Ørsted markets & bioenergy, said: “We’re very pleased with the signing of this agreement which underlines our position as a leading energy trading company in the UK.
“Handling a 15-year trading agreement with the Dogger Bank wind farm is indeed in line with our vision to create a world that runs entirely on green energy. We’re very much looking forward to our cooperation.”
Rupen Tanna, general manager for power at Shell , said: “We are proud to support the world’s largest offshore wind farm through a long-term agreement that will help us to meet the evolving energy needs of our customers.
“As the UK Government underscored earlier this month, offshore wind will play a key role in the UK’s transition to a low-carbon future.”
Tor Mosegaard, Danske Commodities’ vice president and head of European power trading, said: “The Dogger Bank PPA is a great addition to our long-term portfolio and it shows our commitment to British renewables.
“Danske Commodities has traded power in the UK for more than ten years and we see PPAs as a crucial part of ensuring the continued development of renewables.
“As Equinor’s power trading arm and route-to-market for renewable power production, we help turn green ambitions into an economically viable business – one wind farm at a time.”
Gordon Bell, commercial director of energy portfolio management for SSE, said: “We are delighted to secure this PPA for Dogger Bank, bringing green energy from the world’s largest offshore wind farm to customers across the UK, while supporting SSE’s ambition to treble its renewable electricity output by 2030.
“The renewable energy produced by Dogger Bank will play a key role in greening the UK’s electricity generation and driving the transition to a net-zero future.”