The Low Carbon Contracts Company (LCCC) today confirmed that the windfarm has been successful, after receivng its milestone requirement notice on 7 May.
This makes Dudgeon the second major low-carbon generation scheme to reach the milestone, after Dong Energy’s Burbo Bank Extension project.
Generators demonstrate that they have met milestone requirements by either: proving they have spent 10 per cent or more of the estimated total project costs, or providing evidence of progress towards timely commissioning.
LCCC’s head of contract management Nic Rigby said the completion of the milestone requirements confirms the companies’ “significant commitment to the projects”, as well as “ensuring we will have the low-carbon generation that this country needs”.
Statoil vice president and chairman of the Dudgeon board of directors Halfdan Brustad said the milestone fulfillment “confirms that we’re progressing according to plan”.
“Important elements and decisions to undertake the project, such as financial commitment, consents, timetable and key contracts, have been fulfilled,” he said. “Onshore construction has just started, but will pick up considerably throughout this year, preparing for the offshore installation campaigns in 2016 and 2017.”
LCCC is the independent counterparty to all Electricity Market Reform contracts for difference (CfDs) issued last April under the government’s final investment decision for enabling renewables process. Dudgeon is one of five UK offshore windfarms awards such a contract, the others being Beatrice, Hornsea Project One, Walney Extension and Burbo Bank.
In order to reach the financial commitment milestone, developers must have identified all necessary consents and planning permissions to undertake the project and have a credible strategy in place to obtain them. If the developer does not meet this milestone the CfD will be terminated.
The Department of Energy and Climate Change (Decc) said: “The potential for a developer of a poorly-performing project to face potential termination of the CfD provides a protection against budget being allocated to ‘speculative’ projects and allows CfD Budget to be recycled to other viable projects.”
Dudgeon offshore windfarm got the go ahead in July last year and is currently being developed in the North Sea, with construction due to beging next year. The farm is owned by Dudgeon Offshore Wind, a subsidiary of Statoil, Masdar and Statkraft.
Upon completion in late 2017, the windfarm is expected to have an installed capacity of 402MW and will operate for 24 years.