Round 3 auction: a big day for Dogger Bank and HVDC

BVG Associates lead for supply chain analysis and economics Alun Roberts told OWJ that the award of 5 GW of the capacity awarded in the auction to projects on Dogger Bank in the North Sea indicates that high voltage direct current (HVDC) grid connection is “fully competitive.”

“The big news from today’s CfD allocation round is not only the game-changing low prices but also that 5 GW of the circa 5.6 GW will be built using HVDC grid connections,” he said.

The Dogger Bank projects in question are Doggerbank Creyke Beck A P1; Doggerbank Creyke Beck B P1; Doggerbank Teeside A P1 (led by Equinor and SSE); and innogy’s Sofia project. The Equinor/SSE projects are 1.2 GW each; Sofia is a 1.4 GW project.

“On the face of it, the results are disappointing news for Scotland, with only 466 MW of offshore wind successful,” said Mr Roberts. “This has big implications for the ScotWind leasing round.”

He suggests that other Scottish projects seeking contracts in the auction – which amounted to 3.1 GW of potential capacity – suffered a “double whammy” of deep water and high grid charges.

“It is hard to see what can be done on grid charges and the hope for Scotland will be that the next generation of turbines forces all projects to use jackets, thereby closing the gap between shallower and deeper projects,” he said.

“Perhaps, at that point, Scotland’s superior wind speeds could then give its windfarms a competitive advantage? Or maybe the results force a differentiating strategy focused on floating?”

With East Anglia Three in England also unsuccessful, Mr Roberts believes the lesson is that developers can compete being far offshore or in deep water, but you cannot compete with both, at least not yet.