Record amounts of offshore wind secured in latest Government auction

That is significantly higher than the record low price of £37.35 – in 2012 prices – secured in the 2022 auction, although projects later faltered because of rising costs and no contracts were secured the following year as offered prices were too low to attract bids.

The Government pointed to analysis it published on Wednesday, using the levelised cost of energy (LCOE) industry metric, putting the cost of building and operating a new gas-fired power station at £147 per megawatt hour.

Head of the Energy Department’s “mission control” to deliver the clean power pledge, Chris Stark said the UK was seeing power demand grow, after decades of it falling, as the economy grows and increasingly switches to technology such as electric vehicles.

More power generation was needed, and the latest strike price was a “stellar result” when compared to the price of new gas plants, he said.

Mr Stark said Government was confident that once the latest auction results for cheaper technologies – including onshore wind and solar – were announced in a few weeks, analysis would show it would lead to lower bills in the future.

And he said: “It gives us basically an insurance against the next price spike in the cost of fossil fuel, whenever that comes, as inevitably it will.

“That’s an immense insurance that we bought today: every megawatt of offshore wind that we’re bringing on is a few more metric tons of LNG that we don’t need to import in that moment,” he said.

He also criticised Reform UK for threatening to rip up clean power contracts if it won power as “pretty reckless” by adding in extra risk, though added it did not appear to have manifested in higher prices in bids from industry.

Dhara Vyas, Energy UK’s chief executive, said: “Today’s auction results will deliver critical national infrastructure that will strengthen our energy security and deliver lower bills, as well as provide jobs, investment, and economic growth right across Great Britain.”

Douglas Parr, policy director for Greenpeace UK, described it as a “win for climate and billpayers”, though he urged the Government to do more with investment in ports and critical infrastructure, and reducing the cost of borrowing with loan guarantees.

But Anne McCall, director of RSPB Scotland, warned the proposed Berwick Bank offshore wind farm is a “crushing blow for marine wildlife”.

“When 62% of seabird species are in decline across the UK, it is an absolute disgrace that public money will be used to support what is predicted to be one of the world’s most damaging windfarms for birds,” she said.

Andy Prendergast, GMB national secretary, said the “real litmus test” will be whether the auction delivers the jobs promised.

“This is a golden opportunity to on-shore supply chains and create genuine employment opportunities across the UK. It’s imperative that we take it,” he said.

Shadow energy secretary Claire Coutinho said: “These are the highest prices for offshore wind in a decade and higher than the current cost of electricity.

“If you think your bills are too high, this won’t make them any lower,” she warned.

“Bills are now almost £200 higher than when Labour came to power and Ed Miliband is cementing our uncompetitive electricity prices for even longer at a time when the world is becoming more unstable and we need cheap, reliable energy to compete,” she said.