UK doubles offshore wind price cap
Environment groups have applauded the UK government’s decision to almost double the price developers can charge for offshore wind energy in the wake of a disastrous auction that did not attract a single bid.
The Department for Energy Security and Net Zero yesterday raised the price cap for offshore wind energy from £44 (€50) per MWh to £73 (€83), a rise of 66%, and for floating wind power from £116 to £176MWh, a rise of 52%.
“Following an extensive review of the latest evidence, including the impact of global events on supply chains, the government has raised the maximum price offshore wind and other renewables projects can receive in the next Contracts for Difference (CfD) auction to ensure it is performing effectively,” the department says.
“The CfD scheme ensures renewable energy projects receive a guaranteed price from the government for the electricity they generate, encouraging continued investment in the UK – which is already home to the world’s five largest operational offshore wind farm projects and has increased electricity generation from renewables from 6% in the first quarter of 2010 to 48% in the first quarter of this year.”
“Ensuring that the UK continues to unlock investment in renewables is critical to improve Britain’s energy security, drive economic growth, support thousands of new green jobs and enable us to continue to create a lowest cost electricity system for bill payers,” said Renewable UK CEO Dan McGrail. “With intense international competition for investment in renewables, we welcome the strong commitment to the sector shown by Government today, which demonstrates that the UK is intent on remaining a global leader in offshore wind, as well as innovative technologies like floating wind and tidal stream.”
Jess Hooper is Renewable UK’s director for Wales.
“We desperately need a winner in the Celtic Sea now to kick start FLOW project deployment and associated investment in the region,” she said. “There are a handful of Welsh projects – including fixed and floating offshore wind and onshore wind – that would be eligible for the next auction round (AR6), and these uplifts have been warmly welcomed by our members. The new prices provide a greater level of certainty for investors and long-term financial security for developers that projects will be able to be built at a sustainable price.”
The next auction round will be held next year.
