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UK Gov supercharges offshore wind!

4C Offshore | Chloe Emanuel
By: Chloe Emanuel 16/11/2023 GOV.UK

In a significant move to fortify the United Kingdom's position as a global leader in clean energy, the government has announced a notable increase in maximum prices for offshore wind and other renewable energy projects within the Contracts for Difference (CfD) scheme.

The revision involves a substantial 66% rise in maximum prices for offshore wind projects, escalating from £44/MWh to £73/MWh, and a 52% increase for floating offshore wind projects, soaring from £116/MWh to £176/MWh, in preparation for Allocation Round 6 (AR6) slated for the upcoming year.

The objective behind this adjustment is to ensure that projects remain economically viable and competitively priced within AR6. These modifications seek to build upon the triumphs of previous CfD auctions, which have already allocated contracts for approximately 30 GW of new renewable capacity across various technologies since 2014.

Acknowledging the prolific potential within the offshore wind sector, AR6 will allocate a separate funding pool to accommodate the surge in project participation, fostering robust competition among an array of initiatives. This initiative aligns with the UK's ambitious goal of achieving up to 50 GW of offshore wind by 2030, including a capacity of up to 5 GW in floating offshore wind.

The CfD scheme has played a pivotal role in driving down the cost of renewables and ensuring fair returns for electricity consumers, simultaneously propelling job creation and economic growth. This recent government action underscores its commitment to nurturing the renewable energy sector's growth and stability.

The government has also unveiled developed proposals aimed at reviewing applications for the 2025 auction, focusing not only on the ability of projects to deliver low-cost renewable energy but also assessing their environmental and economic sustainability. The assessment will encompass a project's social impact, emphasizing factors such as supply chain effects on job creation and community development.

The alterations in CfD parametres serve as a testament to the UK's dedication to bolstering its renewable energy sector, attracting substantial private investments, and enhancing energy security while embracing a sustainable, low-carbon future.

For more information about offshore wind farm projects across the globe, click here.


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