UK Auction Nets Record Number of Clean Energy Projects, No Offshore Wind

A record number of clean energy projects have been awarded funding from the United Kingdom government’s flagship renewables scheme, according to the country's Department for Energy Security and Net Zero.

From the first annual Contracts for Difference (CfD) round, 95 clean energy projects have been successful with their bids, with a total budget funding of $284.5 million (GBP 227 million), according to a news release from the UK government Friday.

However, no offshore and floating offshore wind projects were successful in the auction, prompting Labour Party shadow secretary for energy security and net zero Ed Miliband to call the auction, in a post on X (formerly Twitter), an “energy security disaster". Energy and Climate Change Minister Graham Stuart said that the absence of successful offshore wind projects was “in line with similar results in countries including Germany and Spain, as a result of the global rise in inflation and the impact on supply chains which presented challenges for projects participating in this round”.

“Offshore wind is central to our ambitions to decarbonize our electricity supply and our ambition to build 50 GW [gigawatts] of offshore wind capacity by 2030, including up to 5 GW of floating wind, remains firm. The UK installed 300 new turbines last year and we will work with industry to make sure we retain our global leadership in this vital technology”, Stuart said.

“This year’s record-breaking CfD round builds on years of renewables growth under this government. Just 7 percent of our electricity came from renewables in 2010, yet in the first quarter of this year it reached 48 percent and this first annual auction will allow us to go further in powering more of Britain from Britain”, Stuart added.

Half of the year’s total capacity was secured by new solar projects, while onshore wind projects have delivered almost 1.5 GW of capacity and secured 24 projects. The round also saw a record 11 projects in tidal stream, with a record capacity of over 50 megawatts (MW), as well as three winning projects for geothermal for the first time in the scheme’s history, totaling 12 MW of capacity. Collectively, the projects will generate enough electricity to power the equivalent of two million homes, according to the release.

Launched in 2014, the CfD scheme ensures projects receive a guaranteed price from the government for the electricity they will generate, giving companies certainty and confidence to invest in the UK, according to the release. Contracts are awarded through a series of competitive auctions, where the lowest-price bids are successful, creating savings for consumers.

The UK government is already gearing up for the sixth round of auctions in 2024 and “looks forward to future participation of offshore and floating offshore wind”, the release said.

In August, a report by the non-profit Energy and Climate Intelligence Unit (ECIU) said that government red tape could limit the number of wind projects approved in the UK and cost taxpayers $1.9 million (GBP 1.5 billion).

The report noted that the previous auction round did not max out its budget due to “inflexible rules”, missing out on 1.0 GW of wind power. The missed projects could also represent a significant setback to the UK’s target of 50 GW of offshore wind by 2030, the report added.

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