- Competition drives down the cost for consumers - new offshore
wind projects will be delivered as low as £58/MWh from 2022-23
- Further boost to the UK’s low-carbon supply chain, as part of
the government’s ambitious Industrial Strategy and upcoming Clean
Growth Plan
Eleven new energy projects worth up to £176m per year have been
successful in the latest competitive auction
for renewable technologies, the government has announced
today (Monday 11 September).
The projects, which are set to generate over 3GW of electricity,
enough to power 3.6 million homes, demonstrate that the UK
continues to be an attractive place to invest in clean energy.
The government is committed to investing in clean technology and
driving economic growth as set out in our ambitious Industrial
Strategy and upcoming Clean Growth Plan.
The competitive approach is continuing to drive cost reductions
in the renewable energy industry - the cost of new offshore wind
projects starting to generate electricity from 2022-23 are now
50% lower than the first auction held in 2015 (1). The other
successful technologies, Advanced Conversion Technologies and
Dedicated Biomass with Combined Heat and Power, also achieved
significant savings.
Competition has also driven down the costs for consumers. The
capacity delivered in this auction cost up to £528m per year less
than it would have in the absence of competition.
Projects are to be delivered across Great Britain from Wales, to
the Scottish Highlands and the West Midlands from 2021.
Minister for Energy and Industry, , said:
We’ve placed clean growth at the heart of the Industrial
Strategy to unlock opportunities across the country, while
cutting carbon emissions.
The offshore wind sector alone will invest £17.5bn in the UK up
to 2021 and thousands of new jobs in British businesses will be
created by the projects announced today. This government will
continue to seize these opportunities as the world moves
towards a low carbon future, and will set out ambitious
proposals in the upcoming Clean Growth Plan.
This investment will help the UK meet its climate targets while
supporting jobs in Britain’s growing renewable industry. The UK
has the largest offshore wind capacity in the world and low
carbon businesses have a combined turnover of £43 billion,
employing 234,000 people.
Notes to Editors
The Contract for Difference auction results can be
found here.
Contracts for Difference, which provide long-term certainty for
investors, are designed to drive investment in a new generation
of clean, secure electricity supplies. This is the second round
of Contracts for Difference auctions, with the first held in
2015. Successful projects receive 15 year contracts.
(1) The cost of offshore wind projects are now 50% lower than the
first auction held in 2015 when comparing the lowest clearing
price for successful offshore wind projects commissioning in
2018/19 and the lowest clearing price for offshore wind projects
commissioning in 2022/23.
Total budget impact for contracts allocated in the second CFD
auction round is forecast by National Grid at up to £176.2m/year
(in 2012 prices). However, actual annual spend will depend on how
wholesale prices and project-specific operational factors change
over time.
The Low Carbon Contracts Company (LCCC) now has 10 working days
in which to make an offer to successful developers. Developers
then have 10 working days after the offer is made to return
signed contracts.
