Government increases renewable energy auction funding to a record £1.5bn
Britain's renewable energy industry will be able to bid for share of £1.5 billion through the government's sixth renewable auction, known as the Contracts for Difference scheme.
This provides developers with initial subsidies for clean energy projects, while keeping costs down for bill payers.
These subsidies are paid back when wholesale electricity prices are higher than the agreed Contract for Difference price. This was seen over Winter 2022/2023, when Contracts for Difference payments reduced the amount needed to fund government energy support schemes by around £18 per typical household.
Overall, the funding uplift represents more than a 50% increase on the budget previously set in March.
Following the increase, the Allocation Round 6 (AR6) budget includes:
- £1.1 billion for offshore wind, an uplift of £300 million
- £185 million for established technologies such as onshore wind and solar, an uplift of £65 million
- £270 million for emerging technologies such as floating offshore wind and tidal, an uplift of £165 million
Energy UK’s chief executive, Emma Pinchbeck said: "It’s a real boost for our clean energy ambitions that the upcoming auction round will now be able to deliver more renewable power. The sooner we can get new wind and solar projects up and running, the sooner we can boost our energy independence with clean, homegrown power that reduces our reliance on expensive foreign gas and helps protect us from a repeat of the price shocks that have hit customers hard in recent years."
Dan McGrail, Chief Executive of Renewables UK, added: "It’s great to see government choosing to unlock more investment in renewable energy projects. This auction will not unlock investment in all shovel-ready projects, so the government will need to ensure that the next auction rounds focus on project delivery to ensure we achieve the Prime Minister’s clean power mission and increase the confidence of investors in the UK’s supply chain."
