Search

Wind Power

Friday
08 Sep 2023

Latest UK Renewables Auction Fails to Attract Offshore Wind Bids

08 Sep 2023  by reuters   

General view of the Walney Extension offshore wind farm operated by Orsted off the coast of Blackpool, Britain, September 5, 2018. REUTERS/Phil Noble/File Photo Acquire Licensing Rights
Britain's latest subsidy auction to help support new renewable energy projects awarded no contracts for offshore wind projects, results published by the government showed on Friday.

In a 2022 auction, offshore wind projects were the main recipient of funding, with 7 gigawatts (GW) awarded.

Offshore wind power is a key technology for reaching Britain's decarbonisation goals, with the government aiming to have 50 GW of offshore wind in operation by 2030, up from around 14 GW at present.

The absence of awards for both offshore and floating offshore wind was a result of the global rise in inflation and the impact on supply chains, which presented challenges for projects participating in this round, the Department for Energy Security and Net Zero said in a statement.

"Offshore wind is central to our ambitions to decarbonise our electricity supply and our ambition to build 50GW of offshore wind capacity by 2030, including up to 5GW of floating wind, remains firm," Energy and Climate Change Minister Graham Stuart said.

The country's contract-for-difference (CfD) scheme, which was launched in 2014, offers renewable power developers a guaranteed price for their electricity.

Awards across all renewable technologies totalled 3.7 gigawatts, down from 11 GW of projects getting contracts in last year's round.

Solar power projects took the top spot with 1.9 GW of capacity, followed by onshore wind with 1.8 GW, the document showed.

The strike price for solar settled at 47 pounds ($58.71) per megawatt hour (MWh) in 2012 prices, up from 45.99 pounds/MWh in the previous round, with the onshore wind price rising to 52.29 pounds/MWh from 42.47 pounds/MWh.

Bid prices for renewable energy CfDs are expressed in 2012 money, with inflation meaning actual prices are higher.

Britain has shifted allocations to annual auctions, instead of every two years, which offered project developers more frequent opportunities to participate and allowed the government to amend conditions more quickly if needed, the statement added.

Britain had offered 227 million pounds to spur renewable power projects, increasing the total amount available in August after project developers had warned more funding was needed to reflect higher costs.

Inflationary pressure, supply chain bottlenecks and rising interest rates have seen the cost of offshore wind projects rise by some 40%, developers such as Sweden's Vattenfall and Germany's RWE have said.

Earlier this year, Vattenfall paused development of a project that was awarded a CfD in last year's round.

Keywords

More News

Loading……