UK awards 10.8 GW new renewable capacity at record low strike prices

Some 10.8 GW of UK onshore and offshore wind, solar, tidal stream and other renewables were awarded Contracts for Difference support in the allocation round four results announced by the Department for Business, Energy and Industrial Strategy July 7.

Five massive offshore wind projects totaling 6.994 GW dominated the auction and delivered the competition's lowest strike prices at GBP37.35/MWh ($44.61/MWh, 2012 prices) – undercutting the previous UK low for offshore wind of GBP39.65/MWh in 2019's allocation round three.

"Eye-watering gas prices are hitting consumers across Europe. The more cheap, clean power we generate within our own borders, the better protected we will be from volatile gas prices that are pushing up bills," said Business and Energy Secretary Kwasi Kwarteng, equating the awards to around six gas-fired power stations.

Onshore wind and solar projects were included in the auction for the first time since 2015, onshore wind securing almost 900 MW of new capacity, clearing at a per unit price (GBP42.47/MWh) more than 45% lower than in the first CFD round in 2015, while solar secured more than 2.2 GW at GBP45.99/MWh (all 2012 prices).

The fourth round also saw tidal stream and floating offshore wind projects successful for the first time.

Tidal stream returned a capacity of 41 MW at GBP178.54/MWh while floating offshore wind returned 32 MW at GBP87.30/MWh.

Platts assessed the price of UK year-ahead baseload power at GBP282.61/MWh July 6. It assessed UK offshore wind capture prices at GBP201.71/MWh July 5, according to S&P Global Commodity Insights data.

Overall, 93 projects with existing planning permission across England, Scotland and Wales have won contracts through the competitive auction process, which is more than in all three previous rounds combined, BEIS said.

"Today's record-breaking auction results show that there is a way to replace unaffordable gas with low-cost clean power generated by a wide range of renewable technologies led by wind, both offshore and onshore. Thanks to the rapid construction times of new onshore wind and solar sites, billpayers will start to feel the benefits of today's auction next year," said RenewableUK's Deputy CEO Melanie Onn.

Target delivery dates for successful onshore wind and solar projects clustered around 2024/25, while those for offshore wind were pinned to 2026/27, BEIS data showed.

UK CFD ALLOCATION ROUND 4: OFFSHORE WIND AWARDS