The UK’s fifth Contract for Difference (CfD) auction witnessed the allocation of contracts for various renewable energy projects. Solar PV (>5MW) secured contracts at a rate of £47/MWh, onshore wind (>5MW) at £52.29/MWh, Geothermal at £119/MWh, and tidal stream projects at £198/MWh. Notably, the auction failed to elicit any bids from offshore wind developers, a matter of significant concern considering the government’s ambitious targets for expanding offshore wind capacity. The absence of offshore wind projects in this auction is particularly worrisome, given the UK’s goal of reaching 50 GW of offshore wind capacity by 2030. In contrast, the previous auction had successfully awarded contracts for 7 GW of offshore wind capacity.
The absence of offshore wind projects in this auction can be attributed to a disconnect between the government’s price caps and the rising costs in the offshore wind sector. Developers found the government’s price cap of £44/MWh, which includes the cost of…
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