UK govt increasing maximum price it's prepared to guarantee companies generating power from new wind farms

Move comes ahead of latest auction for contracts this month

The UK government is taking action to increase the maximum price it's prepared to guarantee companies generating electricity from new wind farms.

The move comes ahead of the latest auction for government backed contracts scheduled to take place this month.

It's hoped to stimulate greater interest from companies in developing new wind farms. 

Back in 2023, under the Conservative government there were no bids placed by offshore wind developers for any projects amid claims the price offered meant projects weren't viable.

This year the maximum guaranteed price for offshore wind will be £113 per megawatt hour - up from £102 in 2024 - a price the Conservatives in the UK describe as "eye-watering".

The UK government claims the prices don't represent the final guaranteed amount because companies will be expected to put in lower bids to win contracts. 

The new guaranteed price, known as the clearing price, would be based on those.

In the event that electricity market prices are in excess of the price set, the companies would pay the excess back to the energy suppliers, which could lower bills for consumers.