On 7 July 2022, the UK Department for Business, Energy and Industrial Strategy announced the winning bids of its fourth contracts for difference auction for renewables (AR4), a scheme that supports renewable electricity generation in the country.
The auction was the nation’s largest yet, awarding new renewable projects worth almost 11GW. This is equivalent to 14% of the UK’s current electricity capacity, or twice the capacity awarded in the last auction, and nearly as much as the previous three combined.
The funded projects from this round should supply power to 12.5 million UK homes, attract £17.77bn in investment and create tens of thousands of skilled jobs – including 16,000 in the onshore and offshore wind industries, said wind power organisation WindEurope in a press release.
AR4’s overall budget of £295m was divided between three pots:
Pot 1 awarded £10m for a capacity of 3.1GW in established onshore technologies such as onshore wind, solar and hydropower. All winning bids are based in Scotland and one-third of the awarded capacity belongs to new onshore wind projects – the first time UK onshore wind has received public finance since 2015.
Pot 2 gave £75m to support a capacity of 670MW for less established technologies such as floating offshore wind, tidal stream, geothermal, wave energy and remote island wind projects. Despite calls for more investment in geothermal power, the government did not award any geothermal bids.
Pot 3 awarded £210m to five offshore wind projects worth 7GW in total. With 12.7GW of existing offshore wind, the UK aims to hit 50GW by 2030.
WindEurope CEO Giles Dickson said: “Europe’s economies face gas shortages and skyrocketing energy costs. Households and companies are struggling to pay their bills. The 8.5GW of new wind farms will help keep electricity affordable and strengthen the UK’s energy security. They will play a central role too in delivering the UK’s climate targets. The UK should publish a clear schedule for their next offshore wind auctions like the Dutch have just done.”
Ørsted’s Hornsea 3 project, which at 2,852MW will be the world’s largest offshore wind farm, was one of the winning proposals. Other successful bids belonged to ESB, the Ignitis Group, Ørsted’s Hornsea 3 project, which at 2,852MW will be the world’s largest offshore wind farm, was one of the winning proposals. Other successful bids belonged to ESB, Iberdrola, the Ignitis Group, Ocean Winds, Red Rock Power and Vattenfall.