The government has awarded offshore wind farm contracts, which could power 12 million homes, in a record-breaking auction that marks a stepping stone in its goal to create a clean electricity system by 2030.
The bidding round was the UK’s most competitive auction for renewable subsidies so far, with energy companies bidding for contracts which guarantee a price for each unit of clean energy they generate.
Funding was awarded for 8.4 gigawatts (GW) of offshore wind farm capacity, which is enough to generate clean electricity for 12 million homes before 2030.
There are now 12 new offshore projects that have been awarded – nine last year – with the results marking the largest single procurement of offshore wind energy in Europe in terms of capacity of power bought.
The contract prices are worth between £89.49 and £91.20 a megawatt-hour (MWh) in 2024 prices. In contrast, the Levelised Cost of Energy (LCOE) industry metric on Wednesday showed the cost of building and operating a new gas-fired power station at £147 per megawatt hour.
The auction confounds “the global challenges facing the industry”, the Department for Energy Security and Net Zero (DESNZ) said, adding that it is “a major vote of confidence in the UK’s new era of energy sovereignty”.
Energy secretary Ed Miliband said: “This is 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.”
“It is a monumental step towards clean power by 2030 and the price secured in this auction is 40% lower than the alternative cost of building and operating a new gas plant.”
“Clean, homegrown, power is the right choice for this country to bring down bills for good and this auction will create thousands of jobs throughout Britain.”
The result is a major win for the energy secretary, meeting expert forecasts that he would need to commission 8.4GW of new offshore wind capacity during the auction round to stay on track to meet the government’s target of removing almost all fossil fuels from the UK’s electricity supply by 2030.
The projects include Berwick Bank in the North Sea – the first new Scottish project since 2022, and the largest planned offshore wind project in the world.
Two others are at Dogger Bank South, off the coast of Yorkshire, and Norfolk Vanguard, off the East Anglian coast – two of the largest offshore wind farms in the world.
Awel Y Mor in the Irish Sea is the first Welsh project to win a contract in more than a decade.
DESNZ said the new projects would generate enough electricity to power 12 million homes, deliver around £22 billion in private investment, support 7,000 jobs and help the UK tackle the climate crisis.
