UK Set To Provide Record GBP 800 Million Support For Offshore Wind Projects
The title of this post, is the same as that of this article on offshoreWIND.biz.
This is the sub-heading.
The UK government has revealed the budget of over GBP 1 billion (approximately EUR 1.2 billion) for this year’s Contracts for Difference (CfD) Allocation Round 6 (AR6) with the majority of it, GBP 800 million (around EUR 936 million), earmarked for offshore wind.
These three paragraphs explain the three pots.
The Department for Energy Security and Net Zero (DESNZ) confirmed that over GBP 1 billion will be set aside for the budget, divided into three pots.
Within the overall budget, GBP 120 million is designated for established technologies like solar and onshore wind in Pot 1, while GBP 105 million is set aside for emerging technologies such as floating offshore wind and geothermal in Pot 2.
According to DESNZ, following an extensive review of the latest evidence, including the impact of global events on supply chains, the government has allocated a record GBP 800 million for offshore wind, making this the largest round yet, with four times more budget available to offshore wind than in the previous round.
I am glad to see the support for geothermal energy.
Whilst, these three paragraphs explain the pricing.
This follows the increase in the maximum price for offshore wind and floating offshore wind in November and will help to deliver the UK’s ambition of up to 50 GW of offshore wind by 2030, including up to 5 GW of floating offshore wind, according to the government.
Last year, CfD Round 5 attracted no investors with the former maximum strike prices set at GBP 44/MWh for offshore wind with fixed-bottom foundations, which was too low for the developers who were facing the consequences of inflation and supply chain challenges. The maximum bid price for floating wind was GBP 114/MWh.
Now, the maximum price available for offshore wind projects with fixed-bottom foundations has risen by 66 per cent, from GBP 44/MWh to GBP 73/MWh. The maximum strike price for floating offshore wind projects increased by 52 per cent, from GBP 116/MWh to GBP 176/MWh ahead of AR6 which will open on 27 March.
Prices have certainly risen, but this paragraph explains a limiting mechanism, which is straight out of the Control Engineer’s Toolbox.
The funding for the support will be sourced from energy bills rather than taxation. However, if the price of electricity surpasses the predetermined rate, additional charges will be applied to wind power, with the excess funds returned to consumers.
I would hope that extensive mathematical modelling has been applied to test the new pricing structure.
The Anonymous Widower 
Even higher subsidies for despite being told they will provide us cheaper generation
Comment by Nicholas Lewis | March 8, 2024 |
This fits with a post I’m working on. In November Claire Coutinho and a German Vice-Chancellor had a meeting in Downing Street, which went very well according to the Press Release, which talked about hydrogen and offshore wind.
If this winter is anything to go by, we did OK, with no great alarms about power cuts, as we have plenty of wind, gas contracts and storage.
But the Germans don’t have the wind resources we have!
As our wind farms meet on the Dogger Bank, any British excess energy can be flogged to the Germans at a premium price, with all those royalties and tax.
So to put in a bit more money to prime the pumps, may come back in spades over the next few years.
Since the meeting RWE have bought the Vanguard wind farms. Could they be planning a massive electrolyser at Bacton or Yarmouth to export hydrogen to Germany?
Norfolk doesn’t have any big electricity users and the NNs (Norfolk Nimbies) are up in arms about more power cables.
Comment by AnonW | March 9, 2024 |
This site shines a light on how much wind is being switched off – im less bothered about the cost but the missed opportunity is huge and is getting bigger by the day. despite several more GW of wind on the system this year we are incapable of using it because the transmission system can’t move it. Thus its becoming futile to connect even more wind until they fix that problem. ESO know whats need the three transmission companies have plans but the hoops they have to jump through are enormous and in some areas ie Anglia the opposition is huge and at best will result in more of it being cabled which is very costly and doesn’t help grid stability.
Comment by nickrl | March 9, 2024
https://wind.axle.energy/
this is the site!
Comment by nickrl | March 9, 2024 |
The Nimbys object to the disruption digging cables in causes.
An undersea interconnector between British and German offshore substations annoys no-one but could make the Treasury a lot of money.
More large batteries would be a big help. But the Nimbies object to them, when they’re on land.
Comment by AnonW | March 9, 2024 |