In a significant move to propel the growth of the renewable energy sector, the UK government have announced they will increase the offshore wind strike price cap in next year’s ‘Contract of Difference’ auction.
This decision underscores the government's commitment to fostering sustainable energy sources and achieving its ambitious climate targets.
The last auction left the UK’s net zero targets in jeopardy when the price offered to offshore wind farm developers was a total failure.
The Administrative Strike Price is set to rise to £73 per megawatt hour, that is a dramatic increase from the £44MW/h that was offered in last year’s auction and didn’t attract a single bidder for the offshore wind capacity.
Industry leaders warned the Department for Energy Security and Net Zero that the price was far too low to meet the rising costs of building wind farms (with the materials and supply chain inflation).
The figure being closer to £70MW/h will appear more viable to new projects and effectively guarantees the amount generators will receive for power.
A spokesperson for the Department of Energy Security and Net Zero said:
"Our net zero targets are not in jeopardy, and we remain fully committed to our 50GW target by 2030.
We have contracted 20GW of offshore wind since 2014 - cementing the UK as a world leader in the technology with the five largest operational wind farms in the world off our shores.
The last Contracts for Difference round saw more than ninety successful projects across solar, onshore wind, tidal power and, for the first time, geo-thermal, enough to power the equivalent of 2 million homes."
According to Sky News, with the formal announcement expected within the next coming weeks.
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