REG - SSE Plc - UK Contracts for Difference Allocation Round 5

SSEAnnouncement

08/09/2023 08:45

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RNS Number : 8576L  SSE PLC  08 September 2023

UK CfD Allocation Round 5

 

SSE plc

 

UK Contracts for Difference Allocation Round 5

 

8 September 2023

 

SSE Renewables has today, 8 September 2023, been informed that Aberarder Wind
Farm, Bhlaraidh Wind Farm Extension, Strathy South Wind Farm, and Viking
Energy Wind Farm have been successful in the UK's fifth Contracts for
Difference (CfD) Allocation Round and are set to be awarded low-carbon power
contracts for a total of 605MW.

 

The successful projects will receive the guaranteed strike price of
£52.29/MWh, based on 2012 prices but annually indexed since then for CPI
inflation, for the contracted low carbon electricity they will generate for a
15-year period from the 2027/28 delivery year.

 

The projects' success in securing contracts follows the UK Government's
Allocation Round 5 process in which the projects competed in 'Pot 1' alongside
various technologies including offshore wind, hydro, energy from waste with
CHP, and solar photovoltaic (PV).

 

Aberarder Wind Farm project, which SSE Renewables acquired in October 2022,
has secured a CfD for 49.99MW (100% of total capacity). The project, adjacent
to the operational Dunmaglass wind farm (SSE share 51.1%) in Strathnairn near
Inverness, was granted planning consent in April 2017.

 

Bhlaraidh Extension Wind Farm project, which was granted planning consent in
August 2022, has secured a CfD for 100.8MW (100% of total capacity).

 

Strathy South Wind Farm project, granted planning consent by the Scottish
Government in November 2021, has secured a CfD for 231MW (100% of total
capacity).

 

Aberarder, Bhlaraidh Extension and Strathy South will all be targeting final
investment decisions in 2024.

 

Finally, the 443MW Viking project, located in the Shetland Islands, has
secured a CfD for 223.6MW (50% of total capacity). This award follows success
in Allocation Round 4 where Viking secured a CfD for 220MW (50% of its total
capacity) at a strike price of £46.39/MWh (based on 2012 prices) for the
2026/27 delivery year. Construction work on the project is progressing well
with all turbines now installed and, with commissioning works set to continue
over the next year, remains on track for completion in late-summer 2024.

 

Once completed, these projects will make an important contribution to the
delivery of SSE plc's Net Zero Acceleration Programme Plus, a fully funded
five-year investment plan to 2027 which will see the Group invest £18bn or
almost £10m a day on critical national infrastructure. This plan includes
increasing SSE Renewables' net capacity from 4GW currently to more than 9GW,
with around 3GW currently under construction.

 

Stephen Wheeler, Managing Director for SSE Renewables, said:

 

"We are pleased to have secured onshore wind contracts for Aberarder,
Bhlaraidh Extension, Strathy South, and Viking. Onshore wind, like offshore,
is a critical component of the net zero transition with an essential role to
play in decarbonising the UK's energy supply.

 

"The CfD scheme has been a hugely successful mechanism for deploying renewable
energy, but going forward, changes to the framework for offshore wind are
required to ensure the UK can enhance its energy security whilst keeping costs
low. Even at higher strike prices than AR5, wind power will still be far
cheaper than other technologies while also delivering highly skilled green
jobs and associated inward investment.

 

"The good news is that we now have a window of opportunity to ensure that the
next auction round can bring forward the significant volumes of both onshore
and offshore wind we need to achieve our energy security targets, unlock
billions of pounds of investment, and enable the UK to retain its global
leadership position in renewables. We stand ready to make these investments
and look forward to working constructively with the Government to build on our
past successes."

 

 

 

 

 

 

 

Ends

 

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