Since 2016, they have awarded subsidy contracts for 8.4 gigawatts (GW) of offshore wind, enough to produce clean, renewable electricity for more than 12 million homes. This auction sets the new record. This second round of bidding represents the largest sum of offshore wind ever procured in any auction held in Britain or Europe.
Energy Secretary Ed Miliband who announced the results highlighted how critical this milestone is to changing the U.K.’s energy mix. These contracts will guarantee that the new offshore windfarms deliver renewable energy to British homes within this decade.
Miliband stated, “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.”
The recent auction awarded contracts to 12 new offshore projects, reflecting a commitment to bolster the UK’s renewable energy sector. The government increased funding available to developers, allowing them to pursue their offshore wind plans without imposing additional costs on consumers.
The prices locked in during this auction are between £89.49 and £91.20 per megawatt-hour (MWh) in 2024 prices. These numbers are well above the levelised cost of electricity from the current price of wholesale electricity at £81/MWh. Even still, they are 40% less than the costs associated with constructing and running a new gas plant.
Miliband emphasized the broader implications of this auction, stating, “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.”
Many experts consider this auction to be a decisive test case for the future trajectory of the UK’s offshore wind industry. Alon Carmel, an offshore wind expert at PA Consulting, described the auction as a “litmus test for the resilience of UK offshore wind after two challenging years.” He noted that the outcome will determine whether the sector is poised to turn renewed energy toward achieving its new 2030 goals. Otherwise, it risks a long-term stagnation.
The smooth running of this auction is absolutely essential if the government is to honour its election promise. Indeed, their goal is to quadruple offshore wind capacity by 2030. It is imperative that any expansion of offshore wind contribute to the goal of realizing a nearly zero carbon electricity system. Moreover, its construction will generate thousands of jobs throughout Britain.