Orsted has confirmed that it will proceed with the Hornsea Three project off Britain’s coast, after making a final investment decision on the scheme.
The 2.9GW project is expected to be completed by the end of 2027.
Its future had been in doubt, with developers pulling out of several high profile projects due to rising costs and lack of government subsidies in recent months.
Earlier this year, Duncan Clark, head of Orsted UK & Ireland, called on the government to announce subsidies to help renewable energy project developers mitigate rising construction costs. He said without support the £8 billion Hornsea Three project risks being put on hold.
In 2022, Orsted was awarded a contract for difference (CfD) for Hornsea Three at a strike price of £37.35 per MWh in 2012 prices.
The CfD framework permits a reduction of the awarded CfD capacity. The company said it will use this flexibility to submit a share of Hornsea Three’s capacity into the UK’s upcoming allocation round 6.
While the last CfD auction received no bids from offshore developers, the government has since announced that offshore wind projects are to be offered a much improved £73 per MWh strike price in next year’s auction.
Orsted is already operating the 1.2GW Hornsea One and 1.3GW Hornsea Two offshore wind farms in the Hornsea zone on the east coast of England.
When Hornsea 3 comes online, the zone’s total capacity will be in excess of 5GW, making it the world’s largest operating offshore wind zone.
Orsted has also secured planning permission for the Hornsea Four project, which alone could have a capacity of up to 2.6 GW.