The UK government has increased the strike price caps for the upcoming Contracts for Different round and committed to an offshore wind-only pot.
The Administrative Strike Price for fixed-foundation bidders in Allocation Round 6 will be £73 per megawatt-hour, up 66% on the £44/MWh in AR5 that failed to attract any entries.
Various industry bodies, including RenewableUK, and developers, including RWE have welcomed the development.
Floating wind’s price ceiling will be set at £176/MWh, up 52% on the £116/MWh in this year’s tender that also did not result in any bids from eligible developers.
The measures, which are being promised following an “extensive review” of the auction regime, will ensure projects can be “sustainably priced and economically viable to compete”, the government said.
London has also committed to establishing a separate pot for offshore wind “in recognition of the high number of projects ready to participate”.
Offshore wind fought it out with onshore wind and solar in this year’s failed auction.
Energy Security Secretary Claire Coutinho (pictured) said: ”The UK is home to the world’s five largest offshore wind farms projects.
“Today we have started the process of our latest Contracts for Difference auction for renewables, opening in March next year.
“We recognise that there have been global challenges in this sector and our new annual auction allows us to reflect this.
“This is a vital part of our plan to have enough homegrown clean energy, bringing bills down for families and strengthening our energy independence.”
The government is also today publishing developed proposals to review applications from the 2025 auction not just on price, but also on how much a project “strengthens the environmental and economic sustainability of the industry”.
The consultation published invites views on how Sustainable Industry Rewards, formerly non-price factors, could be incorporated into the 2025 auction process.
This would be for offshore wind and floating offshore wind companies and would mean additional payments if they reduce the carbon emissions in their supply chains, or if they improve their social benefits, ensuring AR7 is the cleanest and most impactful auction yet.
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, for example.