Orsted has been awarded the largest contracts for difference (CfDs) for offshore wind from the UK government in the latest CfD Allocation Round 6 (AR6).

The UK Department for Energy Security and Net Zero (DESNZ) has awarded Orsted CfDs for a 1,080-megawatt share of the Hornsea 3 Offshore Wind Farm and  2,400MW for Hornsea 4.

A total of 9.6 gigawatts of renewable energy capacity was awarded in the AR6 auction, of which 5.9GW was for offshore wind.

Orsted expects to make a final investment decison on Hornsea 4 within the next 18 months and is currently targeting commissioning of the project before the end of 2030.   The Danish energy giant currently operates 12 offshore wind farms in the UK. Hornsea 3 and Hornsea 4 will be Orsted’s third and fourth gigawatt-scale projects in the Hornsea zone, following Hornsea 1 (1.2GW) and Hornsea 2 (1.3GW), which are already operating.

When Hornsea 3 comes online, Orsted’s Hornsea zone will have a total capacity in excess of 5GW, making it the world’s largest offshore wind zone. The addition of Hornsea 4 will create an offshore wind cluster of around 8GW, and unlock further cluster synergies.

The two-way CfDs for Hornsea 3 run for up to 15 years, starting after commissioning of the wind farm. After the CfD ends, Hornsea 3 will receive the market price for electricity or enter into new power purchase agreements. Orsted will build Hornsea 3 and Hornsea 4, including transmission assets (offshore and onshore substations and export cables). When the wind farms have been fully commissioned, Orsted will, in accordance with UK regulations, divest the transmission assets to a new owner.

Other offshore wind farms awarded CfDs are Inch Cape and Moray West in Scotland, and East Anglia Two and East Anglia Three in England.

“After the failure of last year’s offshore wind auction, it was essential that this auction succeeded and the fact that nine major offshore wind projects have secured contracts will increase investor confidence. There is intense global competition in offshore wind and the next auctions will be crucial for the UK,” says RenewableUK chief executive Dan McGrail,

The UK’s fifth CfD round closed in September last year and saw the UK government awarding 3.7GW of renewable energy projects. None of those were offshore wind farms as offshore wind developers placed no bids.