The Government’s latest Contracts for Difference clean energy auction has seen record low prices for wind power projects. A total of twelve projects have been awarded contracts to generate about 6GW of power.
The offshore wind projects involved will deliver power for as little as £39.65/MWh. This is approximately 30% lower than the previous record set during the auction of 2017.
Record Low Prices for Renewable Energy Projects
The Department for Business, Energy and Industrial Strategy (BEIS) revealed that this was a first time event. Renewables had not previously been expected to come online below market prices without any extra subsidies on energy bills.
The fifteen-year Contracts for Difference clean energy deals agree the price with developers before the projects even begin. Should wholesale electricity prices drop below that agreed price once the projects are underway, then the Government covers the shortfall.
Prime Minister Boris Johnson said of the projects and their record low prices: “It is great news that millions more homes will be powered by clean energy at record low prices. Seizing the opportunities of clean energy not only helps to protect our planet, but will also back businesses and boost jobs across the UK.”
Seven Million Homes to be Powered by Clean Energy
The projects selected by the Contracts for Difference auction should be able to power around seven million UK homes. The projects will hopefully create around 8,000 new jobs between them.
It is understood that the chosen projects were favoured due to a sector deal with the offshore wind industry. The deal was signed earlier this year and is worth £250 million. It means the Government is committed to sourcing up to a third of electricity from renewable energy sources by 2030.
The twelve projects include two that will develop ‘advanced conversion technologies’. This means they will take waste intended for landfill and convert it into energy. The other projects include four onshore wind farms on remote islands as well as six offshore wind farms.
Offshore Wind Power a ‘British Success Story’
Kwasi Kwarteng is the minister for Energy and Clean Growth and he was enthusiastic about the new projects, saying: “Offshore wind is a British success story, with new projects at record low prices creating new opportunities for jobs and economic growth as we leave the EU. The support we are announcing today will mean that over seven million homes will be powered by renewable energy as we decarbonise our energy system, crucial as we continue on the road to net zero emissions by 2050.”
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