The UK Government is reportedly set to increase the price offered to offshore wind farm developers in response to the recent failure of its Contracts for Difference (CfD) auction round.
The last auction, which offered £44 per megawatt hour, attracted no bidders, raising concerns about meeting net zero targets.
The target price for the upcoming auction (AR6) is expected to rise significantly to £70-£75 per megawatt hour, addressing industry warnings that the previous price was insufficient due to rising construction costs.
Industry leaders have reportedly communicated the need for a figure closer to £70 for new projects to be financially viable.
According to Sky News, the announcement of the price adjustment is likely to come this week.
Sam Richards, Founder and Campaign Director for campaign group Britain Remade, said: “Even with this increased price offshore wind is still much cheaper than gas, meaning millions of households up and down the country can benefit from one of the cheapest sources of energy.
“Thanks to the CfD system the offshore industry has been able to drive down costs. But offshore wind could be made even cheaper by slashing red tape, tackling bureaucracy and reforming our outdated planning system which means it can take up to 13 years for a new offshore wind farm to be completed despite constructing the actual turbines only taking 2 years.
“Hopefully this news will restore confidence in the offshore wind sector and Britain can once again secure billions in investment and see vital jobs created.”
