What’s going on here?
A record number of renewable energy projects have secured funding from the UK government in its latest renewable energy auction. 131 projects, including nine offshore wind farms, won contracts in the auction. Together, they’ll add almost 10GW of clean power to the UK grid – enough to power 11 million homes.
What does this mean?
The auction, the sixth of its kind in the UK since 2015, aims to boost development of clean power by encouraging new projects. It works on contracts for difference, which promise developers a guaranteed price for the energy their projects will generate.
The funding comes from people’s energy bills, but it shouldn’t drive prices up. As the cost of renewable energy has fallen below the market price for electricity, these contracts have meant money is actually paid back to bill payers.
The last auction was a flop, with no offshore wind projects bidding at all. But the new Labour government has upped the amount of funding available to £1.5 billion to encourage the bidding, and this year’s auction was very competitive. The largest chunk of funding went to offshore wind projects, which could increase the UK’s capacity by 5GW (gigawatts).
It’s a lot, but it’s not enough. The government’s target is for 50GW of offshore wind capacity by 2030 – we’re currently at 15GW. This is a key part of the government’s plan to deliver net-zero electricity by 2030.
Why should we care?
The amount of electricity generated from fossil fuels has been falling since 2008, but it’ll need to fall faster for the UK to meet its emissions targets. It’s been replaced by low-carbon electricity, which includes renewable sources and nuclear power, which are expanding rapidly.
We can use a measure called carbon intensity to keep track of the shift to low-carbon electricity. Carbon intensity tells us how clean our electricity is, using the overall amount of emissions generated per unit of electricity.
2023 saw the lowest-ever carbon intensity of UK electricity, with an average of 162 g of carbon dioxide per kilowatt hour (gCO2/kWh). The National Grid defines this as “moderate” carbon intensity. If the UK hits its goal for clean power by 2030, we’ll see carbon intensity drop well below 100 gCO2/kWh.
Increasing funding for renewable energy projects is vital to keep replacing fossil fuels with low-carbon power, and the successful auction is a promising sign from the new government.
Be curious
☀️ See how we’re doing on the road to 2030 on the National Grid carbon intensity dashboard
🌬️ Check out Hornsea 3, the world’s largest offshore wind farm, which won in the auction
💡 Know your kilowatts from your gigawatts: how much energy does your home use?
