The price of offshore wind power has fallen to a new record low, as the Government announced 11 gigawatts of winning bids for various renewable technologies.
The Government said it has secured a record amount of renewable power in its flagship auction scheme.
Companies have won the right to build 11 gigawatts (11GW) of on- and offshore wind, solar and floating offshore wind and tidal energy.
That is enough to power around 12 million homes, according to officials.
The so-called contracts for difference (CfD) auction sets a guaranteed price that each project will be paid for every megawatt hour (MWh) of energy it produces. This is called the strike price.
If the price of electricity on the open market is lower than that, subsidies will kick in to top up payments to companies.
But if the price is higher – as at the moment – companies will have to pay back the difference.
On Thursday, the cheapest offshore wind farms quoted a strike price of £37.35. The previous record low had been £39.65 – set in 2019.
By comparison, the strike price for the Hinkley Point C nuclear plant is £106.12.
The UK still gets a significant part of its electricity from gas power. As the price of gas soared over the last year, electricity prices have been trading above £150 per MWh, meaning many wind farms are returning cash to customers.
The price of renewable energy has fallen significantly over recent years.
The first CfD auction was run in 2015 and since then the price of offshore wind in the contracts has fallen by nearly 70%.
Onshore wind is also 45% cheaper than it was in the 2015 round – the last time that onshore wind and solar were eligible to be included.
For the first time, the auction included tidal stream technology, with 41MW set to be built, and floating offshore wind turbines, which will provide 32MW of capacity
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