UK Boosts Offshore Wind Price Guarantees Ahead of Large Auction

The UK government has increased the guaranteed strike prices for offshore wind projects in its upcoming Contracts for Difference (CfD) auction to address soaring costs driven by inflation and supply chain issues. Offshore wind strike prices will rise to £81 per megawatt-hour, with floating wind projects offered £194 per MWh, reflecting the sector's higher costs and earlier development stage. This move aims to stimulate investment critical to Britain's goal of expanding offshore wind capacity from 15 GW to between 43 and 50 GW by 2030, a key component of its decarbonization strategy. The government acknowledges that while these higher strike prices may raise consumer bills, they are necessary to avoid delays in renewable deployment and reduce reliance on volatile fossil fuel imports. However, concerns remain about the pace of development and affordability, as some major projects have been canceled due to previously insufficient subsidies, and critics warn that rising costs could slow build-out and increase energy prices. The government emphasizes that the strike prices set maximum bid levels and that actual auction clearing prices may be lower, with reforms including longer contract durations designed to attract investment.