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On Tuesday, SSE (LSE:SSE) announced that its Cloiche Wind Farm has secured a contract through the UK’s sixth Contracts for Difference (CfD) allocation round. The FTSE 100 energy company highlighted that the project, set to generate 130.5 MW of low-carbon power, will benefit from a guaranteed strike price per megawatt-hour (MWh). This price will be adjusted annually for inflation, ensuring consistent revenue for the renewable energy produced over a 15-year period, beginning in the 2027-2028 delivery year.
With planning consent granted in November last year, the Cloiche Wind Farm is in the final stages of development. A final decision on the project is anticipated in 2025. The secured CfD contract is crucial for the project’s financial stability, providing a reliable path to market and supporting the long-term operation of the wind farm.
Stephen Wheeler, managing director of SSE Renewables, expressed satisfaction with Cloiche’s success in the allocation round, emphasizing the importance of securing a market pathway to advance the project. He underscored the role of the Cloiche Wind Farm in contributing to the UK's green energy goals, though he also pointed out that much more needs to be done to achieve the ambitious clean power target set for 2030. This target requires a substantial increase in offshore wind capacity.
Wheeler also noted that SSE Renewables is currently awaiting consent from the Scottish Government for the Berwick Bank project, which, at 4.1 GW, would be among the world’s largest offshore wind farms. He emphasized that Berwick Bank would play a significant role in meeting both the Scottish and UK Governments' offshore wind targets. Quick approval for such mission-critical projects and the design of future offshore auction rounds to deliver substantial offshore wind capacity will be vital in accelerating the transition to clean power by 2030.
As of 0952 BST, shares in SSE had seen a slight increase, reflecting positive market sentiment following the announcement. The Cloiche Wind Farm represents a significant step forward in the UK's renewable energy landscape, aligning with broader efforts to expand green energy infrastructure and reduce carbon emissions. SSE's ongoing projects, including the anticipated Berwick Bank, underscore the company’s commitment to driving the clean energy transition in the UK.
