Britain is aiming to develop 50 gigawatts (GW) of offshore wind capacity by 2030, up from around 14 GW now as part of a wider climate goal to reach net zero emissions by 2050.
Prior to the auction to incentivise investment, which results showed on Friday failed to interest any offshore wind projects, developers had warned the latest funding available needed to increase to reflect an increase in costs.
But the guaranteed price offered for power generated at the auction was deemed too low by developers.
"We now believe that the UK’s ambitions for a five-fold offshore wind growth by 2030 and a net zero power system by 2035 are unlikely to be met without decisive government action," said Tom Glover UK Country Chair of RWE.
Ashutosh Padelkar, Senior Research Associate at Aurora Energy Research said Britain would have to build as much offshore wind capacity between 2028 and 2030 as it is set to build from 2000 to 2027 to be able to meet the 50 GW target.
This, Padelkar said, would be "extremely challenging".
Britain's government had raised the funding available by 22 million pounds ($27 million) for the auction, taking the total to 227 million pounds. But this proved not to have been enough.
"(The auction) didn't account for recent rise in financing and supply chain costs for renewables and other major infrastructure projects, flowing from the recent rise in interest rates, the conflict in Ukraine and COVID," said Matthieu Hue, Chief Executive of EDF Renewables UK.
Iberdrola-owned Scottish Power CEO Keith Anderson said the result was a "multi-billion pound lost opportunity" for Britain.
The British government said despite the absence of offshore wind the auction had succeeded in supporting other technologies such as solar, tidal and onshore wind projects capable of generating 3.7 GW, equivalent to powering some 2 million homes.
Energy and Climate Change Minister Graham Stuart said offshore wind is central to Britain's efforts to decarbonise the power sector, adding that the government would work with industry to retain leadership in this "vital technology".
