UK Renewable Auction Achieves Record Solar and Wind Projects
The latest renewable energy auction in the United Kingdom has marked a significant achievement, securing a remarkable 14.7 gigawatts (GW) of new capacity for development. This includes an unprecedented number of solar projects and the largest successful onshore wind initiative in England in a decade.
On Tuesday, the UK’s department for energy security and net zero revealed the results from the second round of its Contracts for Difference (CfD) allocation (AR7), which established several records and milestones in renewable energy procurement.
Milestones in Solar Energy
During AR7, the UK achieved its highest ever procurement of solar projects, totalling 4.9 GW across 157 projects with a competitive strike price of £65.23 per megawatt-hour (MWh), equating to approximately AUD 126/MWh. This successful auction underscores the country’s commitment to expanding solar energy capabilities.
In addition, contracts for 1.3 GW of onshore wind were awarded across 28 projects at a strike price of £72.24/MWh (around AUD 139/MWh). Noteworthy among these contracts is the Imerys Wind Farm located in Cornwall, which stands out as the largest onshore wind project to be awarded contracts in a CfD auction in England for the last ten years.
Competitive Pricing Against Fossil Fuels
It is significant that both strike prices for onshore wind and solar are under half the cost of developing and operating new gas power stations, which is currently set at £147/MWh (AUD 283/MWh). The prices achieved are also notably below the price cap, with reductions of 21 per cent and 13 per cent respectively.
AR7 also saw four tidal stream projects securing contracts with a combined capacity of 20.9 MW, further diversifying the UK’s renewable energy portfolio.
Government Response to Success
Ed Miliband, the UK’s energy secretary, remarked, “These results demonstrate that clean British power is the right choice for our nation, finalising a price for new onshore wind and solar that is more than 50% cheaper than alternative gas power solutions.”
He continued, “By supporting solar and onshore wind at scale, we are reducing energy costs for households and businesses, shielding them from volatility driven by fossil fuel markets. This marks a pivotal step towards an energy renaissance.”
All awarded onshore wind and solar projects are projected to commence operations by 2029, while the tidal stream projects are set to be operational by 2030.
Offshore Wind Auction Developments
This announcement follows closely on the heels of the first batch of contracts from AR7, which focused on offshore wind. This segment again achieved remarkable success, being recognised as Europe’s largest offshore wind auction, with 8.4 GW contracted at a strike price of £90.91/MWh (AUD 175/MWh).
Twelve offshore wind projects received contracts, including ten fixed-bottom and two floating offshore wind farms, the latter awarded at a strike price of £216.46/MWh (AUD 417/MWh). Among the fixed-bottom projects, two are expected to have a nameplate capacity of 1,500 MW, while three will have capacities of 1,380 MW. All projects are anticipated to be operational by 2031.
Reflecting on these developments, Miliband stated, “With these results, Britain is reclaiming its energy sovereignty. This historic victory supports the aim for the UK to become self-sufficient in energy management, rather than relying on foreign markets controlled by fossil fuel-producing states.”
He added, “This is a monumental advance towards achieving clean energy by 2030, with the prices secured in this auction reflecting a 40% decrease compared to the costs associated with new gas plant developments.”
