Danish contractor and shipowner NKT is close to clinching an offshore wind farm cable deal worth between €250 and €300m ($305m).
The UK government has this week confirmed the allocation of Contracts for Difference (CfD) for the East Anglia Three (EA3) project owned by ScottishPower Renewables in the North Sea.
CfDs are the government’s main mechanism for supporting low-carbon electricity generation, incentivising investment by providing developers of projects with high up-front costs direct protection from volatile wholesale prices.
The decision is a key step towards a final order for NKT.
The utility company must now give NKT a notice to proceed, conditional on a final investment decision expected no later than the first quarter of 2023.
The NKT contract will comprise the design and manufacturing of the 320 kV DC export cable system, two 150km offshore cables and two sets of 40km onshore cables.
Installation will be carried out by NKT’s own 140-loa cable layer NKT Victoria (built 2017).
“I am very excited about the contract with ScottishPower Renewables, which underlines our customer’s trust in NKT’s ability and know-how to handle large high-voltage direct current (HVDC) turnkey projects,” said NKT chief executive Alexander Kara.
“When fully operational, East Anglia Three has the potential to supply over 1m UK homes with green offshore wind energy which will be an important step for the green transition of the UK,” he added.
The EA3 farm will include between 100 and 120 wind turbines located 69km off the UK coast in the North Sea covering an area of 305 km2.
Once in operation, the site will be able to generate up to 1,400 MW of renewable power.
The 320 kV HVDC cables will be produced in Karlskrona, Sweden, with a low carbon footprint as the factory is running on 100% green electricity.
The contract does not change the 2022 financial outlook for NKT, the company said.