Danish renewable energy firm Ørsted has received a contract for difference (CfD) for its 2.85GW Hornsea III offshore wind farm from the UK’s Department for Business, Energy and Industrial Strategy (BEIS).

BEIS awarded the project at an inflation-indexed strike price of £37.35/MWh ($44.57/MWh) according to 2012 prices.

The two-way CfD for Hornsea III runs for up to 15 years from the wind farm’s commissioning.

Located 160km from the Yorkshire coast, Hornsea III is expected to be commissioned in 2027 and will have the capacity to power 3.2 million UK homes.

The project is part of Ørsted’s Hornsea zone, which also includes Hornsea I and Hornsea II.

The three wind farms have more than 5GW of combined capacity, making Hornsea the world’s largest offshore wind zone.

Hornsea III will support up to 5,000 jobs during its construction phase, as well as a further 1,200 permanent jobs once is it operational.

It will be operated from Ørsted’s operations and maintenance hub in Grimsby.

Ørsted UK region head Duncan Clark said: “This is another landmark for offshore wind in the UK.

“Not only will Hornsea III provide low-cost, clean energy for millions of homes in the UK, it will also deliver thousands of high-quality jobs and billions of pounds of investment in the UK’s offshore wind supply chain.

“Now more than ever there is a need for the further development of renewable energy, not only to address the increasing threats from climate change, but also to increase the stability and resilience of energy supply.

“We look forward to working with government and industry colleagues to accelerate the deployment of offshore wind.”

Hornsea III will also support the UK Government’s target to have 50GW of offshore wind capacity in operation by 2030 as part of the British Energy Security Strategy.