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A record 14 offshore wind projects are eligible for the upcoming contract for difference (CFD) auction, potentially adding nearly 10.3GW of new capacity to the UK’s energy grid.
CFD auctions invite companies to bid to develop UK-based renewable energy projects. As part of the deal, they receive a guaranteed price from the UK government for the electricity they will generate.
In its report EnergyPulse Insights: offshore wind October 2023, industry body RenewableUK said the upcoming auction this summer could set a new record for additional capacity. Last year’s auction was labelled a “disaster” after no new projects submitted bids as the price for energy generated was deemed too low.
The rectify the situation, the UK raised the price it would pay for offshore wind energy by 66%, as well offering additional funds from 2025 for projects that can demonstrate they reduced carbon emissions in their supply chains.
The report found that the upcoming auction alone has the potential to double the country’s offshore wind capacity, with 14 wind farms already eligible to submit bids totalling nearly 10.3GW of new capacity. The previous records were set in 2022 when 8.5GW was eligible across seven projects.
A further 4.7GW of new offshore wind capacity (out of 8.7GW in the planning system) could become eligible before applications open in March. If these projects were to receive consent from the government, 14.9GW of offshore wind capacity would be eligible for this year’s auction.
However, the report notes that being eligible does not mean that projects will choose to submit bids.
The UK currently has 14.7GW of fully operational offshore wind, which generates 14% of its domestic electricity needs. Just one gigawatt of offshore wind generates enough electricity to power over a million British homes for a year.
The global total pipeline of projects in all stages of development (operational, under construction, consented, in the planning system or in early development) now stands at 1,078GW across 1,461 projects in 41 countries; China is top with 195.5GW, the UK second at 99.5GW and Sweden third with 85GW.
The report forecasts that nearly 45GW could be fully operational by the end of 2030, which would significantly help to meet the goals of decarbonising the UK’s energy grid by 2035.
RenewableUK’s chief executive Dan McGrail said: “Our latest EnergyPulse report highlights the enormous opportunity the government has to strengthen the UK’s energy security, with a record number of new offshore wind farms eligible to bid into this year’s clean power auction, and a record amount of new capacity.
“As offshore wind farms are one of our cheapest sources of new power for billpayers, we’re urging ministers to be ambitious when they set out the auction budget and parameters next month. If this is done in the right way, we can secure billions in private investment, driving the growth of the UK’s offshore wind supply chain and new jobs in the sector.”
