Record-breaking renewables auction provides biggest step yet towards net zero emissions

RenewableUK is welcoming the results of today’s Contracts for Difference auction which will support nearly 5.8GW of new renewable energy capacity, enough to meet 8.5% of the UK’s annual power needs.

RenewableUK estimates that the 5.5 GW of offshore wind projects will support over 7,000 jobs on the 6 projects and throughout the UK supply chain. These wind farms will bring up to £12.8bn of investment to the UK, particularly boosting the economies of coastal communities where these projects will be built and operated.

The auction secured new offshore wind capacity at a record low price of £39 per megawatt hour (MWh), a reduction of 66% compared to the price of the first CfD auction in 2015. These offshore wind projects will be built between 2023 and 2025 and are expected to generate 28 terawatt hours of power each year, saving over 12.5m tonnes of CO2 compared to using fossil fuels.

In addition to offshore wind, remote island onshore wind projects on Scottish Islands were also successful in the CfD auction, with four projects securing contract. This is the first time remote island wind projects were eligible to compete in CfD auctions.

In this auction, tidal stream and other innovative renewable technologies failed to secure contracts as they were not able to compete with the price of offshore wind and other successful technologies.

Hugh McNeal, RenewableUK’s Chief Executive said: “Securing this record amount of new renewable energy capacity in this auction is the biggest single step that the UK has taken towards meeting our net zero emissions target. As these results show, offshore wind is the key technology for this country in tackling the climate emergency. Offshore wind will be the backbone of the UK’s clean, modern energy system and will supply at least a third of our power by 2030.

“These new offshore wind projects will support thousands of new jobs and bring billions of pounds of new investment across the UK, particularly benefitting the coastal communities  which are industrial hubs for the offshore wind sector in places like Grimsby, Hull, Teesside, Lowestoft, Great Yarmouth, the Isle of Wight and Aberdeen.

These projects will provide cheap power to consumers and businesses for decades to come. Today marks a new era of cheap power, as the cost of offshore wind is now lower than the expected market price for power. Reaching that ‘zero-subsidy’ level is made possible by the certainty these long-term contracts provide. 

It is fantastic to see wind projects in the Scottish Islands succeeding as they will bring much needed new investment to local economies and support decarbonisation in Scotland.

We have to use every tool in the box to hit net zero emissions and so we are also urging the Government to support onshore wind, as well as innovative renewable technologies like tidal and floating offshore wind”.