This year’s budget to support the next wave of renewable energy schemes has been raised to a “record” £1.5bn, the government has announced, following a failed funding process in 2023.
Energy Secretary Ed Miliband said the additional £500m for the looming renewable energy auction represented a commitment towards Labour’s goal of delivering clean, cheap, low-carbon electricity to families and businesses in the wake of the energy-driven cost of living crisis.
The fallout from Russia’s invasion of Ukraine saw wholesale gas and electricity costs surge to unprecedented levels, with the last government choosing to fill some of the resulting supply void through new oil and gas extraction licences.
Last year’s renewables auction process, an annual event which sees energy firms bid for so-called contracts for difference (CfD), failed to attract a single bid for new offshore wind power.
Energy developers said that was because the then government had failed to take into account the vast increases in costs they had been grappling since the wholesale price spike.
The Conservatives had boosted the budget for September’s auction to £1bn as a result of the criticism but the new government signalled that an even greater commitment was needed to get new green power generation back up to speed.
The so-called ‘budget’ under the CfD scheme guarantees future prices to both generators and consumers so that neither ends up footing big additional bills in the event of a major price shock.
When overall electricity prices rise above the fixed price a generator can charge, money is returned to consumers via their bill.
When…
