Orsted and Iberdrola among the winners in record British renewable energy auction

Orsted and Iberdrola are among the winners in a British renewable energy auction that supported a record-breaking number of projects. The government announced this on Tuesday.

The Labour government that came to power in July plans to decarbonise electricity by 2030. This will require an increase in renewable energy capacity, such as solar and wind.

Ed Miliband, Energy Secretary, said in a press release that "today we achieved a record round of enough renewable energy for 11 million households. This is essential to provide energy security for families throughout the country."

The auction will support projects that can generate almost 10 gigawatts, the majority of which are offshore wind and solar.

Contracts for Differences (CfDs) are being offered by the government to encourage investment in renewable energy projects.

If wholesale electricity prices fall below the minimum price, the budget will cover the difference. If they rise above the minimum price, the producers must pay the difference back to the government.

Orsted's offshore wind project Hornsea 4 won the biggest contract based on capacity.

Iberdrola has also been awarded contracts for the East Anglia Two and East Anglia Three off-shore wind projects.

The government has set a goal to increase the offshore wind power of the country to 60 GW from 15 GW at present.

The results of the sixth CfD auction in Britain, held every year since now, were announced on Tuesday.

Fifth auction

The offshore wind conference held in 2023 did not attract any projects because the incentives offered by developers were too low.

Pranav Menon is a research associate with Aurora Energy Research. He said that the 4.9 GW offshore wind power procured at the last auction leaves the country behind its target.

It is still not moving at the speed required to achieve its ambitious goals. "The 7th auction (next year) is the last opportunity to purchase capacity to be delivered before 2030. An additional 31 GW offshore wind capacity will be needed to reach the 60 GW target," he stated. (Reporting and Editing by Louise Heavens, Kim Coghill and Susanna Twidale)

(source: Reuters)