Tidal energy boost with government announcement

The United Kingdom government has announced a significant increase in the maximum price for tidal and offshore wind projects under its flagship Contracts for Difference (CfD). The move is aimed at solidifying the UK’s position as a global leader in clean energy and fostering sustainable development.

In response to a comprehensive review, which considered the impact of global events on supply chains, the government has elevated the maximum price for tidal, offshore wind and other renewables projects eligible for the next Contracts for Difference auction. The CfD scheme guarantees a fixed price for the electricity generated by renewable energy projects, encouraging continued investment in the UK.

The maximum strike price for tidal energy rose by 29% – from £202/MWh to £261/MWh3.

Offshore wind projects saw a substantial 66% increase, rising from £44/MWh to £73/MWh. Floating offshore wind projects have also experienced a significant boost, with a 52% increase from £116/MWh to £176/MWh, ahead of the upcoming Allocation Round 6 (AR6) set for next year.

This strategic adjustment aims to ensure that projects remain economically viable and competitively priced in AR6, following the success of previous CfD auctions, which have already awarded contracts for approximately 30GW of new renewable capacity across all technologies since 2014.

In an effort to accommodate the high number of offshore wind projects ready to participate in AR6, the government will allocate a separate funding pot exclusively for offshore wind. This move is designed to stimulate healthy competition among a robust pipeline of projects, supporting the UK’s ambitious target of achieving up to 50GW of offshore wind by 2030, including up to 5GW of floating offshore wind.

For more information on Contracts for Difference (CfD) and the upcoming Allocation Round 6, please visit the official government website.

Note: This news release is based on information provided by the government on November 16, 2023.