A make-or-break auction for the UK government’s goal to create a clean electricity system by 2030 has awarded subsidy contracts to enough offshore windfarms to power a record 12m homes.
In Great Britain’s most competitive auction for renewable subsidies to date, energy companies vied for contracts that guarantee the price for each unit of clean electricity they generate.
Contracts were awarded to 12 new offshore projects after ministers increased the amount of funding available to developers to help them deliver their plans without raising bills for consumers.
The funding was awarded to 8.4 gigawatts (GW) of offshore windfarm capacity, or enough to generate clean electricity for more than 12m British homes before the end of the decade. They were awarded a contract price of between £89.49 and £91.20 a megawatt-hour (MWh) in 2024 prices.
Ed Miliband, the energy secretary, said: “We’ve secured a record-breaking 8.4GW of offshore wind, enough to power the equivalent of over 12m homes. This is the largest amount of offshore wind procured in any auction ever in Britain or indeed Europe.
”With these results, we are taking back control of our energy sovereignty. It’s a historic win for those who want Britain to stand on our own two feet, controlling our own energy rather than depending on markets controlled by petrostates and dictators,” Miliband said.
”It is a significant step towards clean power by 2030. The price secured in this auction is 40% lower than the alternative cost of building and operating a new gas plant. Clean, homegrown power is the right choice to bring down bills for good, and this auction will create thousands of jobs throughout Britain.”
The winning bids’ prices are above the typical price of electricity in the wholesale power market, which now stands at about £81/MWh. However, experts say the growth of wind power in the UK energy system could still help to keep bills down despite their higher subsidies because they would lower the market price by limiting the use of expensive gas plants.
The success of the auction was considered crucial if the government hoped to achieve its election pledge to double onshore wind, triple solar power and quadruple offshore wind by 2030 with the aim of creating a virtually zero carbon electricity system by the end of the decade.
The auction round was considered “a litmus test for the resilience of UK offshore wind after two challenging years”, according to Alon Carmel, an offshore wind expert at PA Consulting.
“The results will signal whether the sector can regain momentum toward 2030 targets or faces a prolonged slowdown,” Carmel said.
The offshore wind industry has faced rising costs because of inflation across its supply chain, and higher interest rates to finance its multibillion-pound projects. Large developers building windfarms in US markets have also faced an increasingly hostile political environment under the Trump administration.
