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The UK government has awarded state subsidy contracts to 8.4 gigawatts of planned offshore wind projects, beating analysts’ predictions and boosting its goal of decarbonising the power system by 2030.
Officials said on Wednesday they had awarded “contracts-for-difference” to 8.2GW of fixed-bottom offshore wind projects and 192MW for newer floating offshore wind.
One gigawatt of offshore wind in Britain can typically supply enough electricity for the equivalent of 1mn homes. The result indicates confidence in the sector despite cost and supply chain challenges in recent years.
The prices guaranteed to developers in this auction round range from £89-£91 per megawatt-hour for fixed-bottom offshore wind to £216 per megawatt-hour for floating offshore wind. The current wholesale price is around £80-£90 per MWh.
Under the contracts, electricity bill payers pay wind farm owners the difference between the guaranteed price and the prevailing wholesale price. If the wholesale price is higher than the guaranteed price, developers have to pay back the difference.
This is a developing story