Twelve new green energy projects will be powering more than seven million homes at record low prices following the latest renewables auction.
Led by offshore wind, they will provide around 6GW of capacity - 2.4GW more than the last round - as results of the government’s flagship Contracts for Difference scheme were announced.
For the first time renewables are expected to come online below market prices, removing additional subsidy on bills, meaning a better deal for consumers.
The costs of offshore wind are now around 30 per cent lower than the second auction held in 2017, with projects now being delivered for as low as £39.65/MWh. It is 66 per cent down on the first auction round in 2015.
It makes it the cheapest energy source as economies of scale and efficiencies have driven the price down remarkably.
Today’s results are seen as a major step towards decarbonising the energy system as the 海角视频 targets zero emissions by 2050 , while creating jobs across the 海角视频 – with a figure of 8,000 attributed to this round.
Prime Minister Boris Johnson said: “The 海角视频 is leading the way in the fight against climate change, and it’s great news that millions more homes will be powered by clean energy at record low prices.
“Seizing the opportunities of clean energy not only helps to protect our planet, but will also back businesses and boost jobs across the 海角视频.”
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The Contracts for Difference (CfD) scheme is the government’s primary method of supporting low-carbon electricity. It encourages investment in renewables by providing projects with a stable income while protecting consumers from paying increased support costs when electricity prices are high.
A total of 5GW will come from the Dogger Bank zone, with four projects held by Equinor and Innogy winning backing. In total it is thought to represent £12.8 billion of investment to the 海角视频.
There is also remote island wind and small scale bio generation.
Energy and Clean Growth Minister Kwasi Kwarteng said: “Offshore wind is a British success story, with new projects at record low prices creating new opportunities for jobs and economic growth as we leave the EU.
“The support we’re announcing today will mean that over seven million more homes will be powered by renewable energy as we decarbonise our energy system – crucial as we continue on the road to net zero emissions by 2050.”
It is the first auction since the March signing of a ground-breaking £250 million sector deal with the offshore wind industry which committed us to maximising opportunities and sourcing up to a third of electricity from offshore wind by 2030. CfD auctions will run every two years as a further pipeline of projects is brought forward.
Only yesterday Round Four of seabed leasing from The Crown Estate was announced, opening up more project development.
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Hugh McNeal, Renewable海角视频’s chief executive said: “Securing this record amount of new renewable energy capacity in this auction is the biggest single step that the 海角视频 has taken towards meeting our net zero emissions target. As these results show, offshore wind is the key technology for this country in tackling the climate emergency. Offshore wind will be the backbone of the 海角视频’s clean, modern energy system and will supply at least a third of our power by 2030.
“These new offshore wind projects will support thousands of new jobs and bring billions of pounds of new investment across the 海角视频, particularly benefitting the coastal communities which are industrial hubs for the offshore wind sector in places like Grimsby, Hull, Teesside, Lowestoft, Great Yarmouth, the Isle of Wight and Aberdeen.
“These projects will provide cheap power to consumers and businesses for decades to come. Today marks a new era of cheap power, as the cost of offshore wind is now lower than the expected market price for power. Reaching that ‘zero-subsidy’ level is made possible by the certainty these long-term contracts provide.
“It is fantastic to see wind projects in the Scottish Islands succeeding as they will bring much needed new investment to local economies and support decarbonisation in Scotland.
“We have to use every tool in the box to hit net zero emissions and so we are also urging the Government to support onshore wind, as well as innovative renewable technologies like tidal and floating offshore wind.”
Innogy is behind the largest successful project, the 1.4GW Sofia. The £3 billion project would have the capacity to power more than 1.75 million homes.
Already consented it is 195 km off the Teesside coast on Dogger Bank in the North Sea, has proven wind conditions and relatively shallow water depths of 21 to 36 metres. It was one of four farms brought forward in the zone, with the three others also gaining the CfD backing, with Equinor and SSE behind them.
Sofia will now progress towards the final investment decision, anticipated next year, and into construction, with onshore works earmarked for 2021, commissioning in 2026.
Hans Bünting, chief operating officer for renewables at the German-owned giant, said: “I am very pleased that Sofia, the largest project in our offshore wind portfolio, has been successful in the latest 海角视频 auction. We have passed an important milestone on the way to realising Sofia wind farm and also proved that we can continue to be successful in a very competitive market environment.
"Sofia’s auction success confirms the excellent work the team has done in recent years. Thanks to our extensive know-how in the development as well as the construction and operation of complex offshore projects and our varied research and development activities we have succeeded in developing a valuable project and in further reducing the costs for offshore wind energy in the 海角视频.”
Praise for the system has come from Ørsted, the global leader in offshore wind. As a company it has played a significant role in developing the industry.
In the last auction Hornsea Two, which will become the world’s largest, came in at £57.50 for a winning CfD bid, a 50 per cent drop on 2017.
An interested observer this time out, Matthew Wright, Ørsted’s 海角视频 managing director, said: “The Contracts for Difference scheme is a fantastic example of a supportive Government framework that brings confidence to investors and the benefits of scale and certainty to the supply chain. With the incredible results of the most recent auction, offshore wind is now the cheapest major source of electricity in the 海角视频.
“The offshore wind industry has grown significantly in the 海角视频 and has worked closely with both the Government and the 海角视频 supply chain to ensure that the 海角视频 reaps the benefits from its world-leading position in offshore wind.
“Our mission is to build a world that runs entirely on green energy so it’s great to see support for more of this clean technology in the 海角视频, and we look forward to realising the Government’s aim of at least a third of the 海角视频’s electricity from offshore wind by 2030.”
Ørsted did not enter any projects in this auction round, but has a pipeline of substantial projects in development.