RWE is to acquire from Vattenfall three offshore wind projects located off the coast of Norfolk in East Anglia, including Norfolk Boreas, which the Swedish company shelved last year in response to ‘challenging market conditions’, as well as Norfolk Vanguard East and Norfolk Vanguard West. The three projects each have a planned capacity of 1.4 GW in a deal valued at £963mn.

Norfolk Vanguard West and Norfolk Vanguard East are the most advanced of the three projects. The next milestone in their development will be to secure a contract for difference (CfD) in one of the upcoming auction rounds. RWE also plans to resume development of the Norfolk Boreas project. All three Norfolk projects are expected to be commissioned this decade.

The RWE announcement came as Ørsted reported that it had reached FID on the Hornsea 3 wind project offshore Yorkshire. With a capacity of 2.9 GW and expected to complete around the end of 2027, Hornsea 3 will be Ørsted’s third gigawatt-scale project in the Hornsea zone following Hornsea 1 (1.2 GW) and Hornsea 2 (1.3 GW), which are already being operated out of Ørsted’s operations and maintenance hub in Grimsby.

According to the company, most of the capital expenditure for Hornsea 3 was ‘contracted ahead of recent inflationary pressures, securing competitive prices from the supply chain and allowing time to work collaboratively on value creation opportunities’. The larger wind turbines and the synergies with Hornsea 1 and 2 are also expected to lead to lower operating costs.

Hornsea 3 will produce enough low-cost, renewable electricity to power more than 3.3 million UK homes, making a significant contribution to the UK government’s ambition of having 50 GW offshore wind in operation by 2030.

Once fully commissioned, Hornsea 1, 2, and 3 will have a total capacity of in excess of 5 GW, making it the world’s largest operating offshore wind zone, claims Ørsted.

The Hornsea zone will also include Ørsted’s Hornsea 4 project, which could have a capacity of up to 2.6 GW. Hornsea 4 received its development consent order from the UK government earlier in 2023 and is now eligible for forthcoming CfD allocation rounds.

On the same day (21 December 2023) that Ørsted announced its FID decision, wind energy generation in the UK hit a new record high of 21.8 GW of clean electricity, providing 56% of Britain’s electricity.

Renewables produce enough electricity to power all the UK’s homes in 2023
Meanwhile, new analysis from the Energy and Climate Intelligence Unit’s (ECIU) Power Tracker finds that between 1 January 2023 and 31 December 2023, power generated by wind, hydro and solar is estimated to reach over 90 TWh – more than enough power for all of the UK’s 28 million homes. Generating the same amount of power using gas power stations would have required more than 180 TWh of gas – the same amount needed to heat more than 15.5 million UK homes, says the study.

According to the analysis, renewable generation increased in each quarter of 2023, compared to 2019, including an increase of around a quarter and a fifth in the first and fourth quarters of 2023 respectively. Gas generation fell by 20–30% in each quarter of the year, compared to the same quarter in 2019. Falls in other sources of generation, such as biomass and combined heat and power (CHP), are also seen.

There are several large new wind farms in the pipeline which would help to meet the UK’s growing demand for electricity. However, the government failed to secure any offshore wind bids in the last CfD auction in September 2023. Changes have been made to the scheme’s parameters for the next auction round in 2024 with the hope that the construction of these wind farms will begin shortly after the auction.

In addition, there are concerns around grid infrastructure and the process to connect to the grid keeping pace with the quick rate of buildout. Ofgem and the National Grid Future System Operator have committed to accelerating the process for grid connections and both the Conservative and Labour parties have also made it a priority ahead of the next election.

To that end, National Grid has announced it will accelerate 10 GW of battery storage projects, with 20–30 GW more storage capacity expected to connect by 2030 in its most ambitious scenarios.

According to the ECIU, the UK has a higher gas dependency than any other country in Europe with 40% of its power and 85% of its home heating coming from gas. The International Monetary Fund reports that this, combined with the UK having the least efficient housing stock in western Europe, has meant UK households have been worst hit by rising energy costs.

The rise of renewables
In other news, the rise of renewables contributed to a 22% reduction in UK electricity from fossils fuels in 2023, to 104 TWh, its lowest level since 1957, according to the latest analysis from Carbon Brief.

Electricity from fossil fuels is reported to have fallen by two-thirds (199 TWh) since peaking in 2008. Within that total, coal dropped by 115 TWh (97%) and gas by 80 TWh (45%). These declines have been caused by the rapid expansion of renewable energy (up six-fold since 2008, some 113 TWh) and by lower electricity demand (down 21% since 2008, some 83 TWh).

As a result, fossil fuels made up just 33% of UK electricity supplies in 2023 – their lowest ever share – of which gas was 31%, coal just over 1% and oil just below 1%, reports Carbon Brief.

Low-carbon sources made up 56% of the total, of which renewables were 43% and nuclear 13%. The remainder is from imports (7%) and other sources (3%), such as waste incineration.

Overall, the electricity generated in the UK in 2023 had the lowest-ever carbon intensity, with an average of 162 gCO₂/kWh.

This remains a long way from the government’s ambition for 95% low-carbon electricity by 2030 – just seven years from now – and a fully decarbonised grid by 2035, notes the analysis.