innogy successful in UK auction with Triton Knoll offshore wind project
innogy and Statkraft each hold 50 per cent of the wind farm with a planned installed capacity of 860 megawatts
Final investment decision planned for mid-2018
Capital expenditure expected to total approx. £2 billion
Start of commissioning scheduled for 2021
innogy is relying on the expansion of renewable energies to grow its business activities. Today the company moved a step closer to the realisation of what is currently one of its largest development projects: Triton Knoll, an offshore wind project with a planned installed capacity of 860 megawatts, won a tender from the UK Department for Business, Energy & Industrial Strategy (BEIS) in the latest auction round to support renewable energy projects (Contract for Difference). The project is one of the most cost-effective and most competitive offshore wind projects of the latest auction in the UK. It is being managed by innogy, and innogy and Statkraft each hold a 50 per cent stake.The strike price awarded is £ 74.75 per megawatt hour.
Peter Terium, CEO of innogy SE, says: “I am very pleased that Triton Knoll has been successful in the latest UK auction. Together with our partner Statkraft, we have passed an important milestone on the way to realising our offshore wind power project and also proved that we can be successful in a very competitive market environment. A large proportion of our planned investment in growth is intended to flow into renewable energies. Together with our grid and retail businesses, they will make innogy the innovative, decentralised and sustainable energy company of the future.”
Hans Bünting, COO Renewables of innogy SE, adds: “Today innogy is already one of the large operators of wind power plants in Europe – onshore and offshore. Triton Knoll’s auction success confirms the excellent work we have done in recent years. Thanks to our extensive know-how in the development as well as the construction and operation of complex offshore projects and our varied research and development activities we have succeeded in developing a valuable project and in further reducing the costs for offshore wind energy in the UK.”
Today innogy already operates renewable energy plant with a total generating capacity of roughly 3.7 gigawatts, including over 900 megawatts from offshore wind. In the years 2017 to 2019 innogy intends to invest €1.5 billion to €1.7 billion in renewable energies.
The planned wind farm, located 32 kilometres off the coast of Lincolnshire in the east of England, has already been fully approved. The location offers good, proven wind conditions and moderate average water depths of 18 metres. The final investment decision for Triton Knoll is expected to be made inmid-2018. Until then the financing process will be finalized and contracting agreements completed with the project’s supply chain partners. Also in 2018, onshore works are scheduled to begin to provide the grid connection. Offshore construction is expected to start in 2020. According to current planning, commissioning of Triton Knoll will be started in 2021.
The wind farm has a planned installed generating capacity of 860 megawatts and will be able to supply the equivalent of an expected minimum of 800,000 UK households p.a. with renewable electricity. The planned investment volume amounts to approximately £2 billion (which corresponds to roughly €2.2 billion at the current exchange rate).
Support of new renewable energy projects in the UK based on the contract for difference principle
Since 1 April 2015, new renewable energy plant in the UK is supported on the basis of a mechanism known as “contract for difference” (CfD). In the current auction round from 14 to 18 August 2017 qualified bidders were able to apply for support for their projects. The CfD mechanism envisages green electricity projects receiving support over 15 years, during which time they receive a guaranteed remuneration for the electricity they generate. The electricity is sold on the wholesale market. If the price achieved there is below the remuneration awarded in the CfD auction, the difference is reimbursed to the company. If the price achieved is higher, the company has to make a corresponding payment. The companies that are successful in the auction receive the highest price awarded in the auction per generated megawatt-hour for a period of 15 years – independent of the price they tendered in the auction. The total annual budget used to support a specific technology is limited. That is why only the most cost-effective projects are successful.