One of the UK's largest offshore wind farms delayed starting a government contract that would cap the price of its electricity, instead choosing to sell power in the market at more profitable rates.
The Seagreen wind farm, whose owners include SSE Plc and TotalEnergies SE, expects to delay one of its fixed-price contracts until the fall, rather than starting at the end of March, according to data compiled by Bloomberg from the government-owned company that runs the subsidy mechanism. The contract represents about 13% of the capacity of the wind farm off Scotland's east coast.
It's the latest example of how soaring natural gas and power prices in the UK in recent years opened up opportunities for companies to profit. Unprecedented market moves have left government and regulators to update rules that were crafted in less volatile times.
The move by Seagreen -- which has enough power for 1.6 million British homes -- exploits a now-closed loophole that lets projects postpone fixed-price agreements designed to help protect consumers from spiking markets.
The joint venture that owns the wind farm updated the start date in October 2025 in line with the terms and conditions of the contract, according to an emailed statement from a spokesperson for Seagreen Wind Energy Ltd.
In the UK, offshore wind farms are mostly supported with so-called contracts for difference, which guarantee power prices for a set period. If the market price is below the contract level, the wind farm receives a subsidy paid for by consumers. If prices are higher than the contract, the wind farm pays the difference back to consumers.
These contracts were intended to reduce the cost of financing such massive infrastructure projects while limiting companies' ability to make windfall profits when wholesale prices soar. Developers are given a window in which they can start the contracts, intended to offer flexibility in case of project delays.
But after the wholesale market soared in the run-up to Russia's invasion of Ukraine, companies began to delay the start of their contracts to tap higher prices for longer. The UK moved to close that loophole in 2023 by essentially forcing newly awarded contracts to begin once a project is completed.
"We enter into these contracts in good faith with energy developers, and we expect them to deliver on clean energy projects that will drive economic growth across the country, supporting thousands of good skilled jobs and driving investment into our industrial heartlands and coastal communities," a spokesperson for the Department for Energy Security and Net Zero said in an emailed statement.
Seagreen would sell power under its contracts for around £58 ($78.27) a megawatt-hour. Wholesale prices in the UK have averaged around £88 so far this year, giving the companies a significant reward for maintaining access to market prices for as long as possible.
The wind farm has been fully operational since October 2023. The wind farm could have started its earliest contract in March last year, but chose not to do so.
SSE's renewables arm owns a 49% stake in the Seagreen project, while TotalEnergies and Thailand's PTT Exploration and Production Public Company Ltd each have 25.5%.