Offshore wind CfD blank labelled a ‘monumental failure’

A total of 3.7GW of new renewables was allocated in this year’s auction, down 65 per cent from 10.7GW in last year’s CfD process and the lowest level seen since 2017. The enormous drop is largely attributed to zero bids coming from the offshore wind sector, where the maximum price developers could bid in this year’s auction was cut by £2 to £44 per MWh.

Industry had warned that this price was too low to reflect a widespread rise in costs for offshore wind, driven by supply chain, general inflation and interest rate pressures. However, these calls were ignored, resulting in around 5GW of offshore wind capacity sitting out the auction – enough to power nearly 8m homes a year and save consumers £2bn annually compared to the cost of electricity from gas. The response from industry, environmental groups and the opposition bench has been scathing.

“Industry has warned that rising costs should have been properly priced into this auction,” said RenewableUK CEO Dan McGrail. “The failure to secure any new offshore wind is a major blow for consumers that could, and should, have been averted. Building wind farms means we stabilise the cost of energy for the long-term and reduce our dependency on fossil fuels, prices of which can be manipulated by dictators and despots.