The UK has proposed a record £800m in support for new offshore wind farms in the upcoming AR6 budget. The Department for Energy Security and Net Zero (DESNZ) confirmed that £1 billion will be in the budget, with the majority going towards developing offshore wind projects. This figure represents a tripling of the support since last year’s CfD failed to generate any bids from offshore wind developers, with concerns that the prices (£44 per megawatt-hour) were too low.

The increased support will allow the UK to provide a higher price range of £73/MWh after Energy Secretary Claire Coutinho and her representatives raised the administrative strike prices over the last year. Furthermore, an additional £10 million ring-fenced funds for tidal projects will be available for another year. The Administrative Strike Price has increased for tidal stream by 29% to £261/MWh and 5% for wave energy to £257/MWh.

Keith Anderson, the CEO of ScottishPower, explains that the UK has become a global leader in renewable energy development. Since the failed action in the last auction to attract bids for new offshore projects, the latest announcement is a critical move to get the UK back on the necessary path to achieve its green targets. The government has taken significant action by increasing the available budget and presenting a clear statement in accelerating the vision to generate more affordable, clean energy for the UK. Anderson believes the auction will be very competitive, and based on the scale of the available pipeline, there is the opportunity to expand on this further and potentially rethink the budget shortly.

Energy UK CEO Emma Pinchbeck explains that the government has listened to the energy industry about the necessity to deliver on the UK’s ambition for low-carbon power, with plans to generate more capacity from renewable energy markets, like solar and wind, and continuing to invest in emerging alternative technologies.

Pinchbeck believes a significant increase in the budget for AR6 means investing in domestic clean energy sources that will strengthen energy security and reduce emissions, creating more economic benefits nationwide.

While we focus on the challenge of achieving the 2030 target for 50 GW of offshore wind, the announcement is a positive sign at a time when global competition for investment is rising and will help the UK reinforce its position as a leader in offshore wind.

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