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Energy auctions drive renewable prices down

The Department of Energy and Climate Change says its energy auctions have led to 27 renewable energy projects being offered new contracts. The Government says the energy projects will create enough power for nearly 1.5 million homes.

As a result of the auctions, the National Grid predict £315 million a year in new contracts will now be made available to five renewable energy companies. Some of the contracts will be given to companies that specialise in renewable forms of energy such as onshore wind and solar power, which is growing in popularity. However, contracts are also to be offered to offshore technologies.

The auctions were part of the Government’s Contracts for Difference initiative, which has been designed to help reform the energy market in the UK by encouraging investment into greener forms of power generation. Successful bidders will get contracts that will last for 15 years.

As a result of the auctions, there could be two new offshore and 15 new on shore wind farms. It could also lead to the establishment of 5 new solar projects.

Price Reduction

The Government says the green energy auctions have helped to dramatically reduce prices for green energy by up to 58% in some cases; the move towards greener forms of power generation will also help to considerably reduce CO2 emissions, thus helping to create a cleaner environment.

In a move to drive down the prices of renewable energy, as part of the auctions, contracts were only offered to the companies that gave the most competitive prices. The Government says this means consumers will get much better value for money.

As well as a 58% reduction in the price of solar energy, offshore wind energy has been made 18% cheaper, while onshore forms of energy are 17% cheaper.

Commenting on the auctions, Ed Davey, Energy and Climate Change Secretary, said:

“This world leading auction has delivered contracts for renewables projects right across the UK. These projects could power 1.4 million homes, create thousands of green jobs and give a massive boost to home-grown energy while reducing our reliance on volatile foreign markets”.

“The auction has driven down prices and secured the best possible deal for this new clean, green energy.”

The contracts will be awarded to companies based in England, Scotland and Wales and will include both small businesses and independent generators.

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