The UK government has raised the maximum price it will pay for electricity generated by offshore wind farms by 66% to attract more investment in the sector.
On Thursday, the government said in a statement that it has increased the maximum price threshold that certain renewable energy projects can receive in the next Contracts for Difference (CfD) auction.
The previous auction for offshore wind projects failed to attract any bids, as firms argued the price was too low, as the cost of building wind farms had risen due to supply chain inflation.
Following a review, the maximum strike price for offshore wind projects in the next UK government auction will be raised from £44 per megawatt-hour (MWh) to £73/MWh.
The threshold for floating wind projects has been lifted 52% to £176/MWh, up from £116/MWh, ahead of next year’s sixth allocation round (AR6).
The UK has a target of increasing offshore wind capacity from nearly 13 gigawatts to 50 GW by 2030, enough to power every home in the UK.
The country boosted electricity generation from renewable power from 6% at the start of 2010 to 48% in the equivalent part of 2023, the government said.
UK policymakers also plan to speed up the process of connecting offshore wind farms to the National Grid by reclassifying them as critical national infrastructure and compensating affected communities.