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Britain is set to get nine new offshore wind farms after the Government’s latest renewables auction.
The nine new projects compare to none last year, and include what will be Europe’s largest and second largest wind farm projects – Hornsea 3 and Hornsea 4 off the Yorkshire coast.
They are part of a new wave of green power projects including onshore wind and solar farms, which officials said will generate enough power for 11 million homes.
Energy Secretary Ed Miliband said the auction had got the offshore industry “back on its feet”, adding that the projects are “essential to give energy security to families across the country”.
The projects were announced as part of this year’s Contracts for Difference (CfD) auction, a process started in 2015 as the Government’s mechanism for making sure renewable energy schemes are built.
Because clean projects can be expensive, developers bid to secure a guaranteed rate – or strike price – their project will get for every megawatt hour (MWh) of energy it produces in the coming years.
If the price of electricity on the open market dips below that, subsidies will kick in to top up payments to companies. If the price is higher, companies have to pay back the difference.
The latest round marks an improvement on last year, when no new offshore wind development contracts were agreed because the price was set too low to meet increasing costs in the industry.
But the Government still came in for criticism on Tuesday after the total amount of energy that the latest round of projects can generate is lower than previous totals.
The new projects will create about 9.6 gigawatts (GW) of renewable power, compared to 11GW in a similar auction in 2022.
Meanwhile, offshore wind generation will total just 5GW, lower than the 7GW in 2022.
It is roughly half of what is required each year to meet the Government’s target of 50GW of new offshore wind by 2030.
Ami McCarthy, Greenpeace UK’s political campaigner, said: “This urgently needs to be followed up with a much bigger auction next year, as well as investment for faster grid connections, better planning, and more storage to hold the green power for when it’s needed.”
Others praised the auction for bringing a record number of projects – 131 – across on and offshore wind, solar and floating offshore wind and tidal energy.
Keith Anderson, chief executive of ScottishPower, which won contracts for two major offshore wind farms, said offshore is “back on track after last year’s misstep”.
Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change and the Environment, part of the London School of Economics and Political Science, said it was “a very successful auction and should have instilled more confidence in renewables developers that the Government is taking into account the recent rises in their costs”.
The auction comes after the Government scrapped a de facto ban on onshore wind farms earlier this month via the planning system.
It also follows the formation of Great British Energy, a state-owned energy investment firm which will target £8.3 billion of funding at renewable power projects including offshore wind.
Dan McGrail, chief executive of trade body RenewableUK, said the auction showed Britain is “back in the global race for clean energy investment”.
He said the nine offshore wind projects “will increase investor confidence”, but that future auctions will “need a big step-up from today” to meet 2030 targets.
Emma Pinchbeck, chief executive of Energy UK, added that Tuesday’s figures showed the CfD programme is “once again fit for purpose”.
