The Government has committed to offshore wind investment, with the Department for Energy Security and Net Zero (DESNZ) confirming that it will increase the maximum strike price for offshore wind farms by 66 per cent, to £73 per MWh. Likewise, an increase of 52 per cent has been announced for floating offshore wind (FOW) projects to £176. These revised figures will form the parameters for the next annual CfD auction (Allocation Round 6, or AR6).

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 per cent in the first quarter of 2010 to 48 per cent in the first quarter of this year.

Following an extensive review of the latest evidence, including the impact of global events on supply chains, the Government has raised the levels for AR6, building on the success of previous CfD auctions. These have so far awarded contracts totalling around 30GW of new renewable capacity across all technologies since 2014.

In AR6, offshore wind will also be given a separate funding pot in recognition of the high number of projects ready to participate. This will ensure healthy competition among a strong pipeline of projects.     

Commenting on the move, the co-chair of the Offshore Wind Industry Council (OWIC) Richard Sandford said: "OWIC welcomes the Government’s commitment to secure investment in new offshore wind. Having the right framework in place for private investors is essential for the development of new UK projects which will get us closer to our shared target of 50GW by 2030, create jobs and offer consumers lower cost power at scale.

"The offshore wind industry will continue to work closely with Ministers to retain the UK's position as a global leader in offshore wind, ensuring that each annual auction round enables us to build on our success".

Projects could also get more money from 2025 auction if they can demonstrate a reduction in carbon emissions in their supply chains and demonstrate positive social impact on communities. The Government is also publishing developed proposals to review applications from the 2025 auction not just on their ability to deliver low cost renewable energy, but also on how much a project strengthens the environmental and economic sustainability of the industry. As part of this, a project’s social impact will also be considered – including how supply chains affect jobs and communities.

The government is also increasing maximum bid prices for other technologies too. These include: Geothermal by 32 per cent - from £119/MWh to £157/MWh, solar by 30 per cent - from £47/MWh to £61/MWh and Tidal by 29 per cent - from £202/MWh to £261/MWh.

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