Government offers higher prices for upcoming green energy allocation round

The government has increased the maximum price offshore wind projects can achieve in bidding for Contracts for Difference (CfDs) and will apply it in next years allocation round (AR6). It has also raised maximum prices for other technologies in the upcoming auction.
The maximum strike price has been increased by 66% for offshore wind projects, from £44/MWh to £73/MWh, and by 52% for floating offshore wind projects, from £116/MWh to £176/MWh . In addition, offshore wind will be given a separate funding pot “in recognition of the high number of projects ready to participate”.
Other maximum price changes are
• Geothermal – from £119/MWh to £157/MWh
• Solar – from £47/MWh to £61/MWh
• Tidal – from £202/MWh to £261/MWh
The government has also published proposals to review applications from the 2025 auction on how much a project strengthens the environmental and economic sustainability of the industry, as well as on price. As part of this, a project’s social impact will also be considered, including how supply chains affect jobs and communities.
The consultation published today invites views on how Sustainable Industry Rewards, formerly non-price factors, could be incorporated into the 2025 auction process for offshore wind and floating offshore wind companies. It would mean additional payments if they reduce the carbon emissions in their supply chains, or if they improve their social benefits. This could be done by investing in high-skilled jobs, using more environmentally friendly factories to assemble components, such as wind turbines, investing in new manufacturing facilities or skills in deprived areas, or finding new, innovative ways to reduce their carbon emissions.
Meanwhile a Connections Action Plan will be published later this year to reform the connection process and reduce connection timescales.
Minister of State for Energy Security and Net Zero Graham Stuart said:  “This critical update to the scheme’s design provides further clarity and confidence to the offshore wind sector and ensures the scheme remains competitive for renewable developers investing in new low carbon technologies.”  
Keith Anderson, Chief Executive of ScottishPower, said:“Bringing more green energy onto the system is the single most important thing we can do to cut customers’ bills and strengthen our energy security. This is a welcome signal that the government is listening and is committed to getting the UK’s pipeline of offshore wind projects moving again.
“The real test of that ambition will come when the overall budget for the next auction round is set next year. But, no doubt about it, this is a step in the right direction.”