Add thelocalreport.in As A Trusted Source
this government A record amount of offshore wind power has been secured in an auction that officials insist will be good for UK consumers and investment.
The latest round of flagship renewable energy auction contracts will deliver 8.4 gigawatts (GW) of offshore wind power – an amount experts say is needed this year to enable the government to meet its “clean power” pledge by 2030.
They include six new wind farm projects across the country that pay an average of £91 per megawatt hour of electricity generated, including Berwick Bank, North Sea – The first new Scottish scheme since 2022 and the largest planned offshore wind project in the world.
The other two are on Dogger Bank South, closer to the coast yorkshireand Norfolk Pioneer, off the coast of East Anglia – two of the largest offshore wind farms in the world.
Awel Y Mor irish sea It is the first Welsh project to win the contract in more than a decade.
The auction also supported two plans to develop far more expensive floating offshore wind technology, which would install turbines on floating platforms rather than fixed foundations.
The Department for Energy Security and Net Zero (DESNZ) said the new projects will generate enough electricity to power 12 million homes, generate around £22 billion of private investment, support 7,000 jobs and help the UK tackle the climate crisis.
According to one key industry metric, offshore wind power is 40% cheaper than the cost of building and operating a new gas-fired power plant.
secretary of energy Ed Miliband said: “With these results, the UK is taking back control of our energy sovereignty.
“This is a historic victory for those who want Britain to be self-reliant and control its own energy rather than rely on markets controlled by petrostates and dictators.”
Miliband said reaching 8.4GW marked a “milestone step” towards Labour’s 2030 target of removing almost all fossil fuels from the UK’s electricity supply.
In an auction, developers bid to receive a guaranteed rate (or strike price) that they can charge for every megawatt hour (MWh) they generate.
If the market electricity price is lower than that price, the company will receive a supplemental payment, but if the price is higher, the company must pay back the difference, and consumers pay the supplementary fee and receive subsidies on their electricity bills.
Offshore wind is seen as a key part of achieving the 2030 targets, and its costs have risen in the past few years after years of falling prices and booming growth.
With this latest auction, the government secured an average strike price of £91 per megawatt hour, or just over £65 based on the commonly used 2012 price benchmark.
This was significantly higher than the record low price of £37.35 (at 2012 prices) achieved at the 2022 auction, although the project subsequently ran into trouble due to rising costs and no contract was awarded the following year as offers were too low to attract bids.
The government noted that analysis published on Wednesday, using the levelized cost of energy (LCOE) industry metric, put the cost of building and operating a new gas-fired power plant at £147 per megawatt hour.
Chris Stark, head of mission control for the Department of Energy’s clean power commitments, said UK electricity demand is growing after decades of decline as the economy grows and there is an increasing shift towards technologies such as electric vehicles.
He said more generation was needed and the latest strike price was an “outstanding result” compared with the price of new gas power plants.
Mr Stark said the government was confident that once the results of the latest auctions for cheap technologies, including onshore wind and solar, were released in a matter of weeks, analysis would show it would lead to lower electricity bills in the future.
“It basically gives us insurance against the next fossil fuel price increase, which is inevitable, whenever that comes,” he said.
“That’s the huge insurance we buy today: every megawatt of offshore wind we deliver is equivalent to LNG we don’t need to import at the time,” he said.
He also criticized Reform UK’s threat to tear up clean power contracts if the UK won power as “recklessly” adding extra risks, but added that this did not appear to be reflected in rising industry bid prices.
Dhara Vyas, chief executive of UK Energy, said: “Today’s auction results will deliver critical national infrastructure that will strengthen our energy security and lower electricity bills, and deliver jobs, investment and economic growth across the UK.”
Douglas Parr, policy director at Greenpeace UK, described it as a “win for climate and payers”, although he urged the government to invest more in ports and critical infrastructure and lower borrowing costs through loan guarantees.
But Anne McCall, director of the Royal Society for the Protection of Birds Scotland, warned that the proposed Berwick Bank offshore wind farm would be “a devastating blow to marine wildlife”.
“It is an absolute shame that when 62 per cent of the UK’s seabird species are in decline, public funds are being used to support what is expected to be one of the most damaging wind farms in the world to birds,” she said.
GMB national secretary Andy Prendergast said the “real litmus test” would be whether the auction delivered the jobs promised.
“This is a fantastic opportunity to supply chains and create real jobs within the UK. We have to seize it,” he said.
Shadow energy secretary Claire Coutinho said: “This is the highest price for offshore wind in a decade and is above current electricity costs.
“If you think your bills are too high, this won’t make them lower,” she warns.
“Electricity bills are now almost £200 higher than when Labor came to power, and at a time when the world has become more unstable and we need cheap, reliable energy to compete, Ed Miliband is consolidating our uncompetitive power prices for even longer,” she said.