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Ørsted Secures Contracts for Hornsea 3 and Hornsea 4 Offshore Wind Farms in UK’s Allocation Round 6

Ørsted, a global leader in renewable energy, has secured significant Contracts for Difference (CfD) in the UK’s latest Allocation Round 6 for its two major offshore wind projects, Hornsea 3 and Hornsea 4. These projects, with a combined capacity of nearly 3,500 MW, represent a major step toward the UK government’s goal of increasing offshore wind capacity to 60 GW by 2030. As the world’s largest offshore wind farm zone, Ørsted's Hornsea projects will provide clean, affordable energy to millions of UK households and businesses, reinforcing the nation’s energy security while promoting sustainability.

Ørsted Wins Major Contracts for Offshore Wind Farms in the UK

On September 3, 2024, Ørsted was awarded Contracts for Difference (CfD) for two of its largest offshore wind projects, Hornsea 3 and Hornsea 4, as part of the UK’s Allocation Round 6. The UK Department for Energy Security and Net Zero (DESNZ) granted contracts for 1,080 MW of Hornsea 3 and 2,400 MW for Hornsea 4, with inflation-indexed strike prices of £54.23 per MWh and £58.87 per MWh, respectively. These prices are indexed to 2012 figures.

Ørsted’s Vision for Offshore Wind Energy

Rasmus Errboe, Ørsted’s Deputy CEO and Chief Commercial Officer, shared his excitement about the CfD wins, stating that this marks a significant milestone for two of the world’s largest offshore wind farms. Errboe emphasized how crucial these projects are in helping the UK achieve its goal of quadrupling offshore wind capacity to 60 GW by 2030.

Duncan Clark, Senior Vice President and Head of UK & Ireland at Ørsted, expressed the importance of continued collaboration with the UK government. He highlighted offshore wind as a key element in the country’s energy security strategy, providing low-cost, scalable power to UK households and businesses.

Key Details About Hornsea 3 and Hornsea 4 Offshore Wind Farms

Hornsea 3: The World’s Largest Offshore Wind Farm

Hornsea 3, with a total capacity of 2,955 MW, will become the world’s largest offshore wind farm upon completion. It is part of Ørsted’s Hornsea zone, which already includes Hornsea 1 (1.2 GW) and Hornsea 2 (1.3 GW). Together, these projects will form the largest offshore wind zone globally, generating over 5 GW of clean energy, enough to power approximately 5 million UK homes.

Hornsea 4: A Major Addition to the UK’s Green Energy Portfolio

Ørsted plans to make the Final Investment Decision (FID) for Hornsea 4 within the next 18 months, with the goal of commissioning the project before 2030. The addition of Hornsea 4 will expand the Hornsea zone to 8 GW, creating further synergies and helping the UK meet its renewable energy targets.

Ørsted’s Contracts for Difference (CfD) Details

What is a Contract for Difference (CfD)?

A Contract for Difference (CfD) is a government-backed agreement designed to encourage investment in renewable energy by providing developers with price stability. For Hornsea 3, the CfD will run for up to 15 years after the project is commissioned. During this period, Ørsted will receive inflation-indexed payments based on the agreed strike price.

Once the CfD period ends, Ørsted will either sell the electricity produced at market rates or enter into new Power Purchase Agreements (PPAs).

Building the Transmission Infrastructure

In addition to constructing the wind farms, Ørsted will be responsible for developing the offshore and onshore substations and export cables that will transmit electricity to the UK grid. Once the projects are completed, Ørsted will divest these transmission assets to a new owner, as per UK regulations.

Ørsted’s Commitment to Green Energy

Ørsted continues to lead the way in the renewable energy sector, with 12 operational offshore wind farms in the UK. The company’s vision is to build a world powered entirely by green energy, and these new projects in the Hornsea zone further strengthen its position as a global leader in offshore wind.

Tolga Aramaz

Director at Learn Trade Skills | + posts

Tolga Aramaz is the Director of Learn Trade Skills (LTS), a family-run training centre specialising in electrical installations. With years of experience and a deep understanding of the electrical industry, Tolga is known for their exceptional organisational skills, attention to detail, and commitment to delivering outstanding results. They provide valuable insights and guidance to electricians, contractors, and businesses, ensuring compliance with industry regulations and safety protocols. Through engaging training programmes and consultancy services, Tolga empowers professionals to excel in their roles, fostering long-term relationships built on professionalism and customer satisfaction.

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Ørsted Secures Contracts for Hornsea 3 and Hornsea 4 Offshore Wind Farms in UK’s Allocation Round 6