Britain will increase the price guarantee for offshore wind power by 11%

Documents from the government show that Britain will increase its guaranteed price for offshore wind projects by 11% in this year’s renewables auction, due to rising costs of projects because of inflation and supply-chain bottlenecks.

Labour's government faces increasing pressure from the opposition over its affordability of net-zero and after a 66% increase in prices for offshore wind at last year’s auction.

In a late-Wednesday document, the Department for Energy Security and Net Zero said that "renewable technologies continue face macroeconomic uncertainties and supply chain restrictions - this is especially true for wind technology."

Offshore wind is at the core of the country's plans to decarbonise electricity by 2030. The country aims to increase capacity from 15 GW to 43-50 GW by the end decade.

In Britain's annual renewables auctions project, developers bid for contracts-for-difference (CfD), which offer them a guaranteed price for their electricity.

The government will recover the cost if wholesale prices fall below the strike price or guaranteed level. Developers pay the difference if wholesale prices fall below the strike-price.

The strike price for offshore wind projects in 2012 will be 81 pounds per Megawatt Hour (MWh), up from 73 pounds in the last auction.

The technology is still in its early stages of development. Floating Wind Projects will now be priced at 194 pounds/MWh. This represents an increase from the previous 176 pounds.

DESNZ spokesperson said that the strike prices announced are indicative, and the auction may clear at lower levels.

The spokesperson stated that the only way to bring down gas prices and protect businesses and families from rising costs is by switching to a homegrown power source.

The AR7 auction will start in August, with results being announced between December 2026 and February 2026. (Reporting and editing by Ed Osmond, Susanna Twidale)

(source: Reuters)