The UK government said that it will increase the subsidy level offered to developers in the contracts for difference (CfD) auction round 6 (AR6).
Fixed-bottom offshore wind energy projects will be offered at a strike price of GBP73 (USD90.1)per MWh. The strike price for floating offshore wind energy projects has been set at GBP176 (USD219)per MWh.
The AR6 bidding round will also allocate offshore wind projects separately – in contrast with AR5, where offshore wind competed for the same pot as other renewable technologies.
On September 8, 2023, the UK government announced the results of auction round 5 (AR5). There were no bids for new offshore wind farms, but there were deals for solar, tidal and onshore wind projects. Strike prices were deemed too low for developers to make a return on offshore projects, given supply chain disruption and cost inflation. The AR6 strike prices have been raised for fixed offshore projects by 66 percent, while the floating projects subsidy has been upped by 52 percent, in an attempt to lure developers back into the fold.
In addition to the updated to AR6, the UK government announced plans to write new allocation rules for future CfD rounds, effective 2025. Among the updates, there could be a proposal that enables offshore wind projects to receive more support if developers cut carbon emissions in their supply chain.
