Floating offshore wind and Allocation Round 6 of the Contracts for Difference scheme

A floating wind turbine is an offshore wind turbine built on a floating platform, rather than on the seabed. Floating wind farms, made up of a group of floating wind turbines, can extend the range of marine locations where offshore wind can be deployed and take advantage of wind conditions that tend to be more favourable. The government have set a target to install up to 5 gigawatts of floating wind in the UK by 2030.

There are currently two operational floating wind farms in the UK – Hywind and Kincardie – that total 15.5 megawatts and are both off the coast of Scotland. New floating wind farms are being proposed in Scotland and the Celtic Sea of the Pembrokeshire coast in Wales.

The government’s main support mechanism for commercial-scale low carbon electricity generation, including floating wind farms, is the Contracts for Difference (CfD) scheme. CfD contracts are awarded at yearly auctions, or allocation rounds, with the sixth allocation round (AR6) currently underway. Projects awarded CfD contracts are guaranteed a fixed ‘strike price’ for any electricity they generate.

The budget for AR6 includes up to £105 million (in 2011/12 prices) for emerging technologies, including floating wind. The maximum strike price government are willing to pay for floating wind, the administrative strike price (ASP), has been set at £176 per megawatt-hour (in 2011/12 prices and up from £116 in the previous round). Industry representatives estimate that this budget will deliver between 150 – 200 megawatts of emerging technologies, including floating wind. It is expected that this would mean two floating wind projects being awarded CfD contracts when at least three are likely to seek support.