Dong Energy wins UK contract to build the world's biggest offshore wind farm

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Combined, the projects will create the largest offshore wind farm in the world (Source: Getty)

Denmark's Dong Energy has been awarded a contract to build its 1.4 gigawatt (GW) Hornsea project two to create the world's largest offshore wind farm.

The strike price, or guaranteed price for the power it will supply, was set at £57.50 per megawatt hour (MWh), which is 50 per cent lower than the previous auction just two years ago.

Dong won the contract for its massive wind farm during a British auction for renewables. The UK replaced direct subsidies for renewable power with a contracts for difference system as part of reforms to its electricity market.

Read more: The price of new offshore wind power has halved

Dong is currently building the first phase of the Hornsea project, which has a capacity for 1.2 GW and was guaranteed a price of £140 per MWh.

Phase two of the project, which will be built 89 kilometres off the Yorkshire coast, will produce enough energy to power over 1.3m UK homes. It is expected to be operational from 2022.

"This is a breakthrough moment for offshore wind in the UK and a massive step forward for the industry. Not only will Hornsea project two provide low cost, clean energy to the UK, it will also deliver high quality jobs and another huge boost to the UK supply chain," said ​Matthew Wright, managing director for Dong Energy UK.

Dong has already started the consultation process for Hornsea project three.

Read more: The UK could power 20m homes with offshore wind by 2030