The UK government announced today that its budget for its renewable energy auction would be the largest in the country’s history, £1.5 billion (USD$1.93 billion), including £1.1 billion for offshore wind.

The government said that this is an increase of £500 million, 50% more than the budget set in March and larger than all previous energy auctions combined. Ed Miliband, Secretary of State for Energy Security and Net Zero, said the goal is to build new green infrastructure as part of the mission to deliver clean power by 2030.

Miliband said:

“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. This will restore the UK as a global leader for green technologies and deliver the infrastructure we need to boost our energy independence, protect billpayers, and become a clean energy superpower.”

The government’s renewable auction scheme, known as the Contracts for Difference (CfD) scheme, involves having developers bidding for contracts to help deliver renewable energy projects, with the scheme then providing subsidies for initial development and a guaranteed price for the clean electricity companies generate. The scheme aims to give industry greater certainty to invest, knowing that when electricity prices fluctuate, they will always get a set price for their projects.

The scheme’s design awards contracts through a series of competitive auctions, where the lowest price bids are successful, providing value for money and cheap power for consumers. When the price of electricity exceeds that of the CfD, the developers repay the subsidies.

In addition to £1.1 billion for offshore wind, the announced auction budget also includes £185 million for established technologies such as onshore wind and solar and £270 million for emerging technologies, such as floating offshore wind and tidal.

The new UK government has launched several organizations to promote the growth of renewable energy including the Clean Energy Mission Board, the Onshore Wind Taskforce, and Great British Energy, which in partnership with the Crown Estate is expected to create up to 20-30GW of new offshore wind developments reaching seabed lease stage by 2030.