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The new renewable projects could save consumers £58 per year compared to the cost of power from gas, said trade organisation RenewableUK. It also said the new capacity could reduce the UK’s reliance on expensive imported energy.
The winning CfD bids include 10.8 gigawatts (GW) of new onshore and offshore wind, solar, tidal stream and other renewables, nearly as much capacity as the three previous rounds combined (11.26GW).
The new projects will power 12.5m UK homes and attract £17.8bn in investment, RenewableUK said, creating tens of thousands of highly-skilled jobs. The announcement represents 14% of the UK’s total current electricity capacity (75.8GW).
Nearly two-thirds of this will be new offshore wind, with five projects securing 7GW of new capacity. The cost of offshore projects remained low, with strike prices of just £37.35 per megawatt hour (MWh) – the lowest cost of all renewable technologies, and significantly cheaper than the current cost of electricity, which has been trading at over £150/MWh for much of the year.
Onshore wind competed in the auction for the first time since 2015, with strike prices of £42.47. 16 onshore wind projects won contracts, all of which are in Scotland, representing a total of 1.5GW. 44 solar projects will add a further 2.2GW.
The auction boosted the UK’s position as a leader in innovative new renewable energy technologies, with four tidal stream projects and one floating wind project winning CfDs for the first time. These projects are important stepping-stones to scaling up and bringing down cost, particularly in floating wind where large-scale projects are being developed in Scotland and the Celtic Sea.
RenewableUK’s deputy chief executive Melanie Onn said: “The cost of living crisis and the war in Ukraine have pushed affordability and energy security to the top of everyone’s agenda, with billpayers desperate for relief from fossil fuel price hikes. Today’s record-breaking auction results show that there is a way to replace unaffordable gas with low-cost clean power generated by a wide range of renewable technologies led by wind, both offshore and onshore. Thanks to the rapid construction times of renewables, billpayers will start to feel the benefits of today’s auction next year.
“The auction also showed that the UK is maintaining its position as a world leader in innovative renewable energy technologies like tidal stream and floating wind, which will both play an increasingly significant role in our transition to clean power to meet our net zero goal.”
She added: “Renewables are two- to three-times cheaper than the alternatives, and these prices provide great value to consumers, especially in light of the impacts of inflation and global commodity costs, like steel, on the industry.
“The CfD has delivered a huge amount of new clean energy capacity. Now we need to see an evolution in the way contracts are awarded so that we can secure the massive supply chain and project investment needed for 2030 and beyond, as well as low and stable electricity prices for billpayers. The prize is huge: offshore wind alone is set to employ 100,000 people in the UK by the end of the decade.
“Working closely with government, we need to make this country the most attractive place to invest in. This is particularly important if we want to develop our supply chain in new technologies like floating wind, tidal stream and green hydrogen, in which we can lead the global market and seize the export opportunities this offers.”
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