Renewable energy developers in the UK will reportedly compete for a portion of a new £265 million subsidy from the UK government as it plans to fund a record number of clean energy projects in the industry later this year through the milestone subsidy scheme.
According to credible sources, offshore wind developers would vie for contracts valued up to £200 million annually under the new scheme. On the other hand, onshore wind and solar projects will receive their initial subsidies in more than five years.
Along with the £200 million subsidy pool for offshore wind farms, an additional £55 million will be made available to up and coming renewable technologies like tidal power, with £24 million set aside for floating offshore wind farms.
In addition, for the first time since cutting subsidies in 2015, the government of the UK would make £10 million available to developers of onshore solar and wind farms, or enough to produce up to 5GW of clean energy capacity.
Dan McGrail, chief executive Renewable UK, a trade association for wave power, tidal power, and wind power, stated that the program might attract over £20 billion in private investment, boosting employment and the UK supply chain while lowering energy prices and enabling the UK to meet its climate objectives.
Despite offering an amount that was less than the £325 million and £290 million provided in 2015 and 2017 respectively, the UK government has labeled the upcoming auction as the biggest renewable energy assistance program. This is because the dropping price of renewable energy means that the amount may acquire more renewable capacity than the government's initial three auctions combined.
Renewable energy companies will compete for the capital in a December reverse auction, with the lowest-cost projects securing a contract that assures the price of the clean power they create.
Offshore wind prices fell by a third in the previous auction, dropping below £40 per megawatt-hour, considerably underneath the wholesale energy market price, implying that homeowners are unlikely to pay additional levies on their energy bills.