U.K. Said to Release Offshore Wind Auction Rules in Augustby
Auction parameters expected to boost confidence of developers
Britain plans to double offshore wind capacity by 2020
The U.K. will set green-energy auction rules next month in a move to boost confidence among offshore wind developers eyeing investments, according to a government official.
The new Department for Business, Energy and Industrial Strategy is expected to set its auction budget in August and accept bids later this year, according to the official with knowledge of the plan who asked not to be named before the official announcement. The auction parameters will define the maximum price developers can bid to generate power.
The rules could help show that the U.K. remains on track to double offshore wind capacity to 10 gigawatts by 2020 after it abolished the Department of Energy and Climate Change. That move was one of the first decisions taken by the new government following the June 23 vote to exit the European Union.
Further support for the industry will be strictly conditional on it being able to reduce costs to below 100 pounds per megawatt hour by 2020, former Energy and Climate Change Secretary Amber Rudd said in November.
Strike prices in the next auction are likely to increase because of investor uncertainty caused by the U.K.’s decision to quit the EU, said Hugo Chandler, director of the consultancy New Resource Partners.