Britain’s clean energy sector will bid on a record £1.5 billion worth of public funding this year after the Labour government hiked the budget for the UK’s latest subsidy auction.
Some £1.1 billion has been earmarked for offshore wind under the Allocation Round 6 (AR6), up £300 million from last year when no bids were received from developers.
Energy secretary Ed Miliband labelled the 2023 auction a “catastrophe” after offshore wind developers argued government-guaranteed prices for their energy, known as strike prices, were too low.
The former Conservative government subsequently ramped up strike prices for offshore wind, which will sit at £73 per megawatt hour this year, with Miliband adding the maintained higher level “will restore the UK as a global leader for green technologies”.
An extra £230 million will also be offered for onshore wind and solar, alongside emerging technologies such as tidal power, with the overall budget up 50%.
This year’s auction, AR6, will take place in August before successful projects are announced in September.
Emma Pinchbeck, chief executive of industry body Energy UK, commented: “The sooner we can get new wind and solar projects up and running, the sooner we can boost our energy independence.”
The boost in funding comes after the Labour government has laid out aims to quadruple offshore wind capacity by 2030.
Energy companies Drax Group (LSE:DRX), SSE PLC (LSE:SSE), Centrica PLC (LSE:CNA) and Greencoat UK Wind PLC (LSE:UKW) all moved higher in early trading on Wednesday.