Geothermal by 32% – from £119/MWh to £157/MWh
Offshore wind by 66% – from £44/MWh to £73/MWh
Floating offshore wind by 52% – from £116/MWh to £176/MWh
Solar by 30% – from £47/MWh to £61/MWh
Tidal by 29% – from £202/MWh to £261/MWh
The CfD scheme ensures renewable energy projects receive a guaranteed price from the government for the electricity they generate, encouraging continued investment in the UK – which is already home to the world’s 5 largest operational offshore wind farm projects and has increased electricity generation from renewables from 6% in the first quarter of 2010 to 48% in the first quarter of this year.
The maximum price changes were announced ahead of Allocation Round 6 (AR6) which is set for next year. This will help ensure projects are sustainably priced and economically viable to compete in AR6, building on the success of previous CfD auctions. These have so far awarded contracts totalling around 30GW of new renewable capacity across all technologies since 2014.
A few months ago, Geothermal Engineering Limited (GEL) became the first company to secure CfDs for geothermal projects under AR5. CfDs were granted for three projects – the United Downs, Manhay, and Penhallow projects – with a total potential installed capacity of 12 MW. GEL was able to secure the maximum bid price of £119/MWh for 15-year deals.
“Today we have started the process of our latest Contracts for Difference auction for renewables, opening in March next year. We recognise that there have been global challenges in this sector and our new annual auction allows us to reflect this,” said UK Energy Security Secretary Claire Coutinho. “This is a vital part of our plan to have enough homegrown clean energy, bringing bills down for families and strengthening our energy independence.”
“Last year’s Contracts for Difference scheme saw more than 90 clean, homegrown energy projects and today we have shown our ongoing commitment to retaining our global leadership in renewable energy,” said Minister of State for Energy Security and Net Zero Graham Stuart.
“This scheme has played an indispensable role in driving forward renewable energy projects,” added Exchequer Secretary to the Treasury Gareth Davies MP. “Supporting industry to make investments in renewable energy is essential to achieving our net zero goals, vital to attracting investment to our coastal communities, supporting jobs, and levelling up the country. I am proud to see Britain remain at the helm of green energy innovation as we move ahead.”