Offshore windfarm contracts to fuel 12m homes in Great Britain after record auction | Renewable energy

A landmark auction for the UK government’s goal of creating a clean electricity system by 2030 has awarded subsidy contracts to enough offshore wind farms to power a record 12 million homes.

In Britain’s most competitive auction ever for renewable energy subsidies, energy companies competed for contracts guaranteeing the price of every unit of clean electricity they produce.

Contracts have been awarded to 12 new offshore projects after ministers increased the amount of funding available to developers to help them deliver their projects without increasing consumer bills.

Funding has been awarded for 8.4 gigawatts (GW) of offshore wind farm capacity, enough to generate clean electricity for more than 12 million UK homes before the end of the decade. They secured a contract price of between £89.49 and £91.20 per megawatt hour (MWh) at 2024 prices.

Ed Miliband, the Energy Secretary, said: “We have secured a record 8.4GW of offshore wind, enough to power the equivalent of more than 12 million homes. This is the largest amount of offshore wind purchased at an auction ever in Britain or even Europe.

“With these results, we regain control of our energy sovereignty. This is a historic victory for those who want Britain to be self-reliant, controlling its own energy rather than relying on markets controlled by petrostates and dictators,” Miliband said.

“This is an important step towards clean energy by 2030. The price achieved in this auction is 40% lower than the alternative cost of building and operating a new gas plant. Clean, local energy is the right choice to lower bills for good, and this auction will create thousands of jobs across Britain.”

The prices of the winning bids are higher than the usual price of electricity on the wholesale electricity market, which now stands at around £81/MWh. However, experts say the growth of wind power in the UK energy system could still help reduce bills despite higher subsidies, as it would drive down the market price by limiting the use of expensive gas plants.

The success of the auction was seen as crucial if the government hoped to deliver on its election pledge to double onshore wind, triple solar and quadruple offshore wind by 2030, with the aim of creating a virtually zero-carbon electricity system by the end of the decade.

The auction round was seen as “a litmus test for the resilience of UK offshore wind after two difficult years”, according to Alon Carmel, offshore wind expert at PA Consulting.

“The results will indicate whether the sector can regain momentum towards the 2030 goals or whether it faces a prolonged downturn,” Carmel said.

The offshore wind industry has faced rising costs due to inflation in its supply chain and rising interest rates to finance its multi-billion pound projects. Large developers building wind farms in U.S. markets have also faced an increasingly hostile political environment under the Trump administration.