UK secures record supply of offshore wind but price rises

UK secures record supply of offshore wind but price rises

The UK has recently awarded contracts for an unprecedented number of offshore wind projects, marking a significant push toward expanding the nation’s clean energy capacity. These developments cover locations across England, Scotland, and Wales, and notably include what is projected to be the largest offshore wind farm in the world, situated off Scotland’s coast in the North Sea. Despite this ambitious expansion, some experts caution that these efforts alone may fall short of helping the government achieve its 2030 target for clean electricity generation.

Among the newly approved projects, the Berwick Bank wind farm stands out as the largest planned offshore wind installation globally. Other notable projects receiving contracts are Dogger Bank South near Yorkshire, Norfolk Vanguard off the coast of East Anglia, and Awel Y Mor, the first Welsh offshore wind project granted in over ten years. The UK government aims to source at least 95% of Great Britain’s electricity from clean energy by 2030. This goal encompasses renewable technologies such as wind and solar, along with nuclear power, as a strategy to lower greenhouse gas emissions associated with fossil fuel use.

Offshore wind plays a central role in the UK’s clean energy future, given the abundant wind resources available around its coastal regions. The government has set a target of 43 gigawatts (GW) of offshore wind capacity by 2030, which is a substantial increase from the current 16.6GW operational capacity, with an additional 11.7GW presently under construction. Building and integrating offshore wind farms into the national grid is a complex process, and this auction securing 8.4GW of new contracts is critical for keeping the 2030 offshore wind goals within reach. Nonetheless, experts remain cautious, emphasizing the challenges ahead in delivering this capacity on time. Nick Civetta of Aurora Energy Research noted, “Getting that amount of capacity online by 2030 [will be] extremely challenging.”

The offshore wind sector, like many other industries, has faced rising costs driven by global supply chain disruptions, increasing steel prices, and elevated interest rates—some of which have been linked to the ongoing Russia-Ukraine conflict. Last year, energy firm Orsted withdrew from one of the UK’s largest wind projects, Hornsea 4, despite its prior contract award. The latest auction saw fixed-bottom offshore wind projects receive an average fixed price of nearly £91 per megawatt-hour (MWh) for electricity generated in 2024 prices. While this is a reduction when compared to prices in 2015, it represents an increase from the £82/MWh awarded in the previous new-build auction.

The government acknowledges that offshore wind costs have risen but argues these must be assessed in relation to the expense of constructing and operating new gas-fired power stations. Their estimates place the cost of gas generation at around £147/MWh when including carbon pricing. Energy Secretary Ed Miliband commented on the results as a milestone for the UK’s energy independence, stating, “With these results, Britain is taking back control of our energy sovereignty. This is a historic win for those who want Britain to stand on our own two feet, controlling our own energy rather than depending on markets controlled by petrostates and dictators.” Meanwhile, opposition parties remain divided: the Conservatives have previously criticized the government for potentially locking in high offshore wind costs for decades, while groups like the Liberal Democrats, Greens, SNP, and Plaid Cymru generally support expanding renewables, although Scottish and Welsh parties advocate for greater local control over their energy resources

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