UK government secures new offshore wind capacity and it’s going to cost the public dearly
The UK Government’s sixth allocation (“AR6”) round for “renewable” energy auctions has achieved a record-breaking outcome, securing 9.6 gigawatts of “clean” power across 131 projects. This marks a significant turnaround for offshore wind projects, which saw no contracts awarded in the previous auction round.
However, it comes at a cost to consumers. A loophole in Government contracts could cost households up to £180 million a year.
The AR6 auction has sent a “clear signal” that the UK is back in the global race for clean energy investment, according to RenewableUK, a coalition of over 450 companies which aims to ensure increasing amounts of “renewable” electricity are deployed across the UK.
As The Daily Sceptic noted, “Renewables were never cheap and they are now getting much more expensive. More expensive than Government projections and more expensive than gas-fired electricity. Yet the Labour Government has recently increased the budget for AR6 so it can deliver even more of this more expensive, intermittent electricity.”
Net Zero Watch highlights the same. The price for new electricity from offshore wind has risen to £82/MWh in current prices, a significant 58% increase since the previous successful auction.
Higher prices will lead directly to higher household bills and the results raise the already astronomical price tag of meeting Ed Miliband’s unrealistic target to decarbonise the power grid by 2030.
A loophole in Government contracts could cost households up to £180 million a year.
Rising Prices for Offshore Wind Warn of the Mounting Cost of Net Zero
Originally published by Net Zero Watch on 3 September 2024.
Results for the latest auction (AR6) for renewable energy subsidies, known as Contracts for Difference (“CfDs”), were released this morning. The auction was the first since the humiliating 5th allocation round (AR5) in which there were no bids for new offshore wind capacity. The Government has secured 3.4GW of new offshore wind capacity by awarding a large increase in price to the technology that it regards as the cornerstone of its energy plans.
The auction had an increased budget of £1.555 billion, having been increased by Miliband. It is the largest CfD auction to date and will therefore lock in far more capacity at higher prices than the previous auction.
Flexibilities in the contracts drawn up by Government officials meant that older wind farm projects could withdraw up to 25% of contracted capacity and re-enter it into this year’s auction, allowing them to take advantage of the higher prices on offer. 1.6GW of successful bids came from such projects – a loophole that may cost households as much as £180m each year. It’s another slip-up for a Department that already allowed just one windfarm to net £647 million from delaying the start of its CfD contract.
Before the election, forecasts produced by Aurora Energy Research found that Labour’s 2030 target to decarbonise the power grid was “unfeasible,” but even these forecasts used over-optimistic numbers for renewable energy costs. These new results show costs to be rising rather than falling, vindicating warnings made repeatedly by Net Zero Watch. If Miliband’s Net Zero plans could once be regarded as “unfeasible,” they must surely now be seen as ruinous.
Net Zero Watch director, Andrew Montford, said:
How many times were we subjected to the chorus of “wind is cheap”? That refrain now rings hollow and these results show Miliband’s green utopianism to be even more costly and impractical than once feared.
About Net Zero Watch
Net Zero Watch is a campaign group launched and managed by the Global Warming Policy Forum (“GWPF”), a charitable organisation in the UK established in November 2009, just three days after the “Climategate” emails were released. The group scrutinises the UK government’s net zero emissions plans and provides a “clear view of the reality of climate and energy policies.”
Featured image: Miliband vows ‘no stone unturned’ in finding green future for Grangemouth (right)
