According to the Labour government, the boost brings the overall budget to seven times what was available at the auction last year.
The Labour government has upped the value of its summer subsidy auction by 50% to £1.5 billion, meaning that clean energy developers will have unprecedented access to finance.
According to the government, the boost brings the overall budget to seven times what was available at the auction last year, when compared to the previously released numbers.
The goal of the action is to stimulate investment in the UK’s clean energy sector once again, as the previous administration was unable to lift the ban on onshore wind or grant a single new offshore wind contract in the previous year.
As per the government, extending the auction round will protect household budgets from increases in the worldwide market for fossil fuels by supplying more renewable energy and creating high-quality jobs in Britain’s coastal communities and industrial heartlands.
“Last year’s auction round was a catastrophe, with zero offshore wind secured, and delaying our move away from expensive fossil fuels to energy independence,” stated energy secretary Ed Miliband.
In addition, he said, “Instead, we are backing industry to build in Britain, with this year’s auction getting its biggest budget yet. This will restore the UK as a global leader for green technologies and deliver the infrastructure we need to boost our energy independence, protect billpayers, and become a clean energy superpower.”
Increased funding for offshore wind projects from the previous government’s £800m to up to £1.1bn this summer. According to analysts at Jefferies, an investment in 6-7GW of offshore wind capacity, or about 5 million houses’ worth, might result from this.
Following senior executives’ warnings that Labour’s renewable energy objectives would already be in peril, only weeks after the party office on a platform of doubling onshore wind, tripling solar power, and quadrupling offshore wind by 2030, Miliband unveiled plans for the investment boom.
The general director of EnBW’s UK branch, which is working with BP to develop offshore wind projects, Damien Zachlod, stated: “How close we get to the government’s 2030 offshore wind target depends on whatever happens in the next 18 to 24 months.”
“The auction needed a reset after last year and we welcome the increased budget, which is an important investment signal to the industry to make Britain a clean energy superpower, secure more low-cost offshore wind and spur economic growth,” stated Keith Anderson, chief executive of Scottish Power, which is anticipated to compete for two offshore wind contracts in the auction.
Energy bills cover the cost of the contracts, which guarantee new renewable energy projects at a fixed price for each unit of clean energy they generate.
However, because of the way the contracts are written, it is not anticipated that customers will pay more for them. Households will be responsible for additional costs to make up the gap if wholesale power market prices drop below the amount specified in the contract. However, the price of renewable energy is now more often than not less than the going rate for power, thus these contracts really give billpayers money back.
The reset was made public after fresh official data verified that 2023 will be a record-breaking year for the production of renewable energy. According to official statistics, 36.7% of the power generated in the UK last year came from fossil fuels, while 46.4% came from renewable sources.
According to the data, wind power surpassed the previous record of 24.7% in 2022 to generate a record 28.1% of electricity in 2023, making it the UK’s largest source of clean power. Offshore wind contributed a record 17% of the UK’s electricity, up from 13.8% in 2022, while onshore wind produced a record 11.2%, down from 10.8% in 2022.