The UK government has confirmed a significant increase in the AR6 Contracts for Difference (CfD) budget, boosting it by more than 50% to a total of £1.56 billion. This represents an additional £500 million compared to the initial figure set earlier this year.
The budget increase comes ahead of next week's sealed bidding window, where developers will submit proposals for 15-year contracts. The allocation for offshore wind in Pot 3 has been raised to £1.1 billion, up from the £800 million previously allocated in March by the former Conservative government.
For Pot 1, which includes onshore wind and solar technologies, the budget has been increased by £65 million to a total of £185 million. Pot 2, designated for emerging technologies such as floating wind and tidal, has received an additional £165 million, bringing its total to £270 million.
Energy Secretary Ed Miliband commented on the changes, stating, “Last year's auction round was a catastrophe, with zero offshore wind secured, and delaying our move away from expensive fossil fuels to energy independence. Instead, we are backing industry to build in Britain, with this year's auction getting its biggest budget yet.”
Miliband emphasized that this increase would help the UK regain its position as a global leader in green technologies, delivering essential infrastructure to boost energy independence and protect billpayers.
Industry leaders have been advocating for increased funding in AR6 to maximize the potential of the 10GW of eligible offshore wind capacity. Keith Anderson, CEO of ScottishPower, remarked, “Today's move will unlock billions in private investment, support thousands of jobs, strengthen our energy security, and produce the green and affordable power needed for decades to come.”
The Department of Energy Security and Net Zero highlighted that the increased offshore wind budget sends “a strong signal to industry to invest in UK waters,” while the overall uplift will “accelerate the delivery of clean, cheap, low-carbon electricity.”
Energy Minister Michael Shanks noted, “Increasing the budget by more than 50% will boost industry confidence to back clean energy, attracting cutting-edge clean technologies to Britain as we accelerate to a decarbonised power sector by 2030.”
Emma Pinchbeck, CEO of Energy UK, welcomed the funding increase, saying it would provide “a real boost for our clean energy ambitions.” She stressed the importance of offshore wind in meeting the government's 2030 targets, acknowledging the increased budget as a significant step forward.
“That remains a huge challenge but this is certainly a big step in the right direction and another welcome demonstration of the government's ambitions,” Pinchbeck added.
