Work to install a major wind farm off the coast of Aberdeen will begin later this year after the project cleared a key hurdle.
Ocean Winds announced on Friday that its Moray West development has secured £2 bn of non-recourse project finance and reached financial close.
According to the company, a joint venture between Spain’s EDP Renewables and France’s Engie, it becomes the first UK offshore wind farm to rely in majority on corporate power purchase agreements (CPPAs) for the commercialisation of its output.
Pacts have been signed with long-term strategic partners, for more than 50% of the green energy produced by Moray West, enabling the project’s rapid progress.
‘Largest’, and ‘first’
The CPPAs were originated in partnership with Engie, and represent the “largest contracts of their kind” implemented in the UK market to date.
Moray West bagged a contract for difference (CfD) for a third of the installed capacity in the UK’s latest distribution process.
It means the project, which has been supported to this point by minority shareholder Ignitis Group, is the first of the Allocation Round 4 (AR4) cohort to reach financial close.
Country manager for Ocean Winds in the UK, Adam Morrison said: “Reaching Financial Close demonstrates the confidence that the financial markets have in the strength of the project and its delivery partners.
“The project team can now focus their combined efforts and expertise to deliver the project on time. In Scotland the significant economic successes include the use of the key ports of Invergordon and Nigg, together with our long-term commitment to investing in Buckie as the operations and maintenance base.”
Straight onto the next stage
Financial close allows Moray West, which will comprise of 60 turbines, to move to secure the remaining elements of supply chain activity in preparation for offshore installation works in later 2023.
The wind farm is slated to begin generating full power by 2025, and will provide the equivalent of 1.33 million households a year with access to green electricity.
Monopiles for the project will be manufactured by Dajin Heavy Industry, with tower components coming from Dajon Offshore Heavy Industry – both companies are Chinese.
Meanwhile, UAE-based fabrication firm Lamprell will supply 62 transition pieces, leading to claims that Scotland’s just transition is disappearing “into the desert wind”.
There will be some benefits for UK companies though, with Port of Nigg securing turbine installation work, and JDR, located near Blyth, winning a cable supply contract.
Chief operating officer for Ocean Winds, Grzegorz Gorski said: “Ocean Winds is very proud to keep on delivering on its commercial scale projects; Moray West representing the second secured project finance in our portfolio of projects for the year 2023, after the îles d’Yeu Noirmoutier offshore wind farm in France.
“We now have close to 1.5 GW of offshore wind energy in construction in the world, in addition to our 1.5 GW already operating.
“Building on our local engagement, we are advancing rapidly globally to provide clean energy to consumers and to companies, accompanying them in their energy transition.”
Moray Offshore will be located adjacent to its sister site, Moray East, in the Moray Firth, off the north-east coast.
Planning consents for the project were secured in 2019, and in early 2022 initial onshore construction works commenced.