Britain’s renewable energy auction has secured enough new clean electricity projects to power 11 million UK homes after the Labor government handed out record funding to suppliers.
The £1.5 billion auction will support 131 new projects, including wind farms, solar farms and tidal power projects, as ministers increased the amount of funding available to seven times the amount proposed last year.
The sixth auction of its kind is expected to deliver an unprecedented amount of clean energy at less than the cost of operating a gas-fired power plant by offering developers a guaranteed price for each unit of clean electricity they produce. This should ultimately mean lower energy bills for consumers.
The success of this industry auction was seen as crucial if the government hoped to achieve its election promise of doubling onshore wind, tripling solar and quadrupling offshore wind by 2030.
Weeks after winning the July general election, Labor pushed for a 50% increase in the value of the auction compared to the budget promised by Tory ministers. The move was aimed at reviving investment in Britain’s clean energy industry after the previous government failed to secure a new offshore wind deal last year or remove onshore wind blocks.
However, Tuesday’s auction secured only half of the offshore wind capacity needed each year until the end of the decade if the government hopes to meet its green energy goals. Almost two-thirds of the new offshore wind capacity that was eligible to bid failed to bid enough to secure a contract.
Tom Glover, chief executive of RWE’s UK business, which lost out on an offshore wind contract, said: “It’s a bit disappointing in the context of the government’s targets that only 30 per cent of eligible new projects won – but it shows how competitive it is. . It was an auction, which is a good thing for the consumer.
That means if the government is to meet its goal of quadrupling offshore wind capacity to 60 gigawatts by 2030, it will have to work harder now to win more offshore wind farms away in future auctions.
The bulk of the funding went to 5 gigawatts of offshore wind farm capacity, or enough to generate clean electricity for more than 3 million UK homes before the end of the decade. The nine projects were awarded lower-than-expected contract prices of between £75/MWh and £82/MWh in today’s prices.
These prices are lower than the typical electricity price on the wholesale electricity market, which is now £84/MWh – and well below the guaranteed price of £128/MWh for new nuclear plants.
Keith Anderson, chief executive of Scottish Power, which won contracts to support new offshore wind to power 1 million UK homes, said: “We can debate whether 5 gigawatts of offshore wind is enough, but the point is The important thing is that we are moving forward. It has proven that last year’s failure was a failure and the auction process is working. This should give the government confidence that it can be more ambitious in future auctions. »
The auction also awarded contracts for around 90 new solar farms with a total capacity of 3.3 GW at around £69 per MWh and 22 new onshore wind farms with a total capacity of almost 1 GW at around £71 per MWh.
After upgrading the newsletter
Tidal power developers won contracts for six new projects at £240/MWh, and the world’s largest planned floating offshore wind farm was awarded a contract at £194/MWh.
Energy Secretary Ed Miliband said: “Today we have now achieved a record round… This is another important step in our mission for clean energy by 2030 – making Britain energy independent and reducing bills for good.”
He added: “This auction has produced an unprecedented number of solar projects that reinforce our mission for the solar revolution. We have moved forward with onshore wind, securing the world’s largest commercial floating offshore wind project and the offshore industry.” put it back on its feet. “
Dan McGrail, chief executive of trade body RenewableUK, said: “Following the failure of last year’s offshore wind auction, the success of this auction was imperative and the fact that nine major offshore wind projects have secured contracts is a boost to investor confidence. .
The government has set a world-leading clean energy mission for 2030, and it needs a big step to achieve it today. “The industry stands ready to work with the government to ensure that we increase the amount of new renewable energy imported each year to the levels needed to meet the clean energy mandate.”
#renewable #energy #auction #electricity #million #homes