Summary
The government has increased the maximum price it will pay for electricity from new wind farms. This move is part of a plan to lower household bills and create a fossil fuel-free electricity grid by 2030. The new prices are meant to encourage more companies to bid on wind energy projects during the upcoming auction.
Key Facts
- The maximum price for electricity from offshore wind is now £113 per megawatt-hour, up from £102 in 2024.
- Floating offshore wind technology, which is newer, is priced at £271/MWh, up from £245.
- Onshore wind's price has risen slightly from £89/MWh to £92/MWh.
- Solar energy prices have decreased to £75/MWh from £85/MWh.
- The government backs contracts by agreeing to pay a fixed price for electricity from these projects for up to 20 years.
- Companies compete in auctions by submitting bids lower than the maximum price to win contracts.
- If market prices are higher than the set price, companies return the extra money to energy suppliers.
- In 2023, no offshore wind projects received bids due to previous price limitations.
