The UK government is including onshore solar and wind power projects in the next renewable energy auction for the first time since 2015. It aims to double the amount of renewable energy it will subsidize by doing so. The auction will be held at the end of 2021.
The last auction in September 2019 delivered 5.8GW of renewable energy, but next year’s auction is expected to be twice that. Energy companies will have the opportunity to compete for subsidy contracts in the competitive auction set to support up to 12GW of renewable energy. That’s enough electricity to charge as many as 20 million electric vehicles yearly.
Last year’s auction saw offshore wind costs tumble by a third to record lows. Many believe this upcoming auction will deliver even lower costs. In the 2019 auction, offshore wind’s cost fell to less than the price of electricity in the wholesale energy market – to about £40 per megawatt-hour. That means consumers don’t have to pay extra to support the construction of the projects.
The next event will consist of three separate auctions – each designated for a particular type of renewable energy technology. The three categories include offshore wind projects, onshore wind and solar farms, and less established technologies such as tidal stream projects and floating offshore windfarms. The contracts won will guarantee a price for the clean electricity they generate.
According to Energy minister Kwasi Kwarteng, the new auction builds on Boris Johnson’s 10-point climate plan to end the country’s contribution to rising global emissions by 2050. The prime minister’s plan includes increasing Britain’s offshore wind capacity four-fold over the next decade to 40GW. It also has plans for millions of electric vehicles and green hydrogen – both of which require a boom in renewable energy to be successful.
Kwarteng also says that the government support contracts known as Contracts for Difference (CfDs) sold at these auctions have made the UK a world leader in clean energy. This next CfD auction should put the UK “firmly on the path towards building a new, green industrial revolution.”
This year, Cornwall Energy analysts predicted that there could be 13GW worth of projects ready to vie for a contract at the 2021 auction. These include 6GW of offshore wind power, include 5.5GW of onshore wind and solar farms, and the balance made up of the less common technologies.
