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The UK government will hand out £315 million to 27 renewable energy projects through its first competitive auction for low carbon financial support.
The majority of the 2GW of capacity to be funded through the first auction round was awarded to two offshore wind projects totaling 1.1GW. In addition15 onshore wind projects and 5 solar projects will receive funding contracts, the results show.
The clearing price for offshore wind is 18 per cent lower than the government’s maximum price for the technology of £140/MWh at £114.39/MWh of electricity produced.
The results stand in contrast to the government’s earlier CfD allocation round – which ran without a competitive auction – where offshore wind farms secured between £140-150/MWh, sparking criticism that the deals fail to offer the consumer value for money.
In the latest allocation round renewables developers were asked to compete at auction for funding, with the vast majority of successful bidders clearing the auction “significantly” below the maximum price the government was willing to pay.
According to the government investment in a total of 2GW of capacity will come forward at a cost to the consumer of £110 million less than without competition.
Solar proved to be the most competitive technology at auction with 71.55MW clearing at a price of just £50/MWh compared to a maximum offer of £120/MWh. Meanwhile, onshore wind totaling 748.55MW cleared at £79.23/MWh compared to a top offer of £95/MWh.
“The auction has driven down prices and secured the best possible deal for this new clean, green energy,” said energy secretary Ed Davey
Only energy from waste failed to clear significantly below the maximum strike prices, Government said. Energy from waste secured a strike price of £80/MWh, the maximum allowed by government.
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