Almost 11GW of onshore wind, offshore wind, solar, tidal energy and other forms of renewable energy has secured contracts in what has been the biggest Contracts for Difference (CfD) ever.

“Thanks to today’s record renewable energy auction, we have secured almost 11GW of clean, home-grown electricity – which would provide as much power as around 6 gas fired power stations,” said business and energy secretary Kwasi Kwarteng.

“These energy projects already have planning permission, now they have a funding contract in place. We’re going to these projects built as soon as possible to better protect millions of British families from rising costs.”

Overall 93 projects have secured contracts, this is more than all three previous CfD rounds combined, bolstered by Pot One technologies – onshore wind and solar – being able to participate since the first auction in 2015 as well as the first contracts going to emerging technologies including tidal and floating offshore wind.

The biggest winner was offshore wind, securing almost 7GW across five projects at a strike price of £37.35/MWh (strike prices were worked out on the basis of 2012’s prices, and therefore today that would be £43.37/MWh (4.3p/kWh).

Project Name

Region

Applicant

Technology Type

Size (MW)

Strike Price (£/MWh)

Delivery Year

Inch Cape Phase 1

Scotland

“INCH CAPE OFFSHORE LIMITED”

Offshore Wind

1080

37.35

2026/27

EA3, Phase 1

England

EAST ANGLIA THREE LIMITED

Offshore Wind

1372.34

37.35

2026/27

Norfolk Boreas (Phase 1)

England

NORFOLK BOREAS LIMITED

Offshore Wind

1396

37.35

2026/27

Hornsea Project Three Offshore Wind Farm

England

“ORSTED HORNSEA PROJECT THREE (UK) LIMITED”

Offshore Wind

2852

37.35

2026/27

Moray West Offshore Wind Farm

Scotland

“MORAY OFFSHORE WINDFARM (WEST) LIMITED”

Offshore Wind

294

37.35

2026/27

Offshore wind has been the biggest winner in the CfD mechanisms, with the support scheme contributing the rapid expansion of the technology by providing investor certainty which has helped to lower prices.

Indeed, the price per unit (MWh) of offshore wind secured in AR4 is almost 70% less than in the first allocation round in 2015.

The 7MW of capacity set to be supported through the CfD is enough to increase the UK’s overall capacity built and under construction by 35%, taking it a “significant step towards meeting the government’s 50GW of offshore wind ambition by 2030,” the government said.

This target was announced in the recent British Energy Security Strategy, as the country looks to boost its domestic renewable generation amidst continued volatility in the international gas market.

“Winning a CfD for Norfolk Boreas is great news for the UK’s net zero future and fundamental to meeting the government’s targets for offshore wind,” said Danielle Lane, country manager for Vattenfall in the UK.

“Today is a major step forward as we look to create a low cost, low carbon energy system. This auction firmly places the UK as a superpower of renewable energy, accelerates the delivery of our climate targets and reduces our reliance on expensive, imported gas.”

Given high gas and wholesale power prices over the last year, CfD contracted generators have been paying back surplus profit. According to Low Carbon Contracts Company (LCCC) in January, around £39,222,407 is to be returned to electricity suppliers through the CfD due to the high power prices.

As a result of this, some previous auction winners have come under criticism for delaying triggering the CfD in order to maximise what they can make from the high wholesale prices. In response to the Moray East Offshore Wind Farm delaying taking up its CfD, the Department for Business, Energy and Industrial Strategy (BEIS) called on companies to act “fairly”.

Beyond offshore wind, one of the big winners in the AR4 was solar power, which won over 2.2GW across 66 projects – more than all the other generation technologies combined – with a strike price of £45.99/MWh (£53.40/MWh (5.3p/kWh) in today’s money).

Winning projects include Cleve Hill Solar Farm, the first nationally significant solar infrastructure project to be approved. The 350MW solar development in Kent was the largest singular solar project to win a contract in AR4, with 112MW of its capacity gaining CfD support. The smallest solar projects to gain contracts were 6MW.

There are five solar projects that are expected to be delivered in 2023/24, earlier than any other winners in this fourth auction.

“Today’s announcement of over 2GW of subsidy free contracts cements solar as a major part of the solution to Britain’s energy security crisis. Solar and wind are now undeniably the cheapest, as well as the cleanest, ways to power the country,” said Chris Hewett, chief executive of Solar Energy UK.

“CfDs are only one way to deliver solar. There are many solar farms already under construction that will sell their power direct to the market, and rooftop installations are cutting corporate and household energy bills.”

The other Pot One technology to take part in AR4, onshore wind, secured almost 0.9GW of new capacity across nine projects all located in Scotland. Its clearing price – £42.47/MWh (£49.32/MWh (4.9p/kWh) in today’s money) – is more than 45% lower than in the first CfD round in 2015.

“Thanks to the rapid construction times of new onshore wind and solar sites, billpayers will start to feel the benefits of today’s auction next year,” said RenewableUK deputy chief executive Melanie Onn.

“The auction also showed that the UK is maintaining its position as a world-leader in innovative renewable energy technologies like tidal stream and floating wind, which will both play an increasingly significant role in our transition to clean power to meet our net zero goal.”

Of the new technologies involved in the auction, offshore floating wind secured 32MW for a strike price of £87.30/MWh (£101.38/MWh in today’s money). This is all from one project, the TwinHub Floating Offshore Wind Project being developed by Wave Hub in England, which has a delivery date of 2026/27.

The government allocated £75 million for less-established technologies in AR4, including ringfencing £24 million for floating offshore wind projects and £20 million for tidal stream projects.

There were four tidal projects that won contracts in AR4 with a total capacity of 41MW, and securing a strike price of £178.54/MWh (£207.34/MWh in today’s money).

Project Name

Region

Applicant

Technology Type

Size (MW)

Strike Price (£/MWh)

Delivery Year

Orbital Marine Eday 2

Scotland

ORBITAL PROJECTS 4 LIMITED

Tidal Stream

4.8

178.54

2026/27

Morlais Magallanes GR3

Wales

“MAGALLANES TIDAL ENERGY LTD”

Tidal Stream

5.62

178.54

2025/26

Orbital Marine Eday 1

Scotland

“ORBITAL PROJECTS 3 LIMITED”

Tidal Stream

2.4

178.54

2026/27

MeyGen Phase 2

Scotland

MeyGen PLC

Tidal Stream

28

178.54

2026/27

“This fourth round shows the government’s Contracts for Difference scheme continues to be a roaring success,” added energy minister Greg Hands.

“Not only has it secured a record capacity of clean electricity, it ensures the UK will have a future powered by a resilient and diverse supply of homegrown energy by bringing forward a greater range of renewable technologies than ever before.”

Six remote island wind projects secured contracts, with a total capacity of almost 600MW at a strike price of £46.39/MWh (£53.87/MWh in today’s money).

Project Name

Region

Applicant

Technology Type

Size (MW)

Strike Price (£/MWh)

Delivery Year

Stornoway Wind Farm

Scotland

“STORNOWAY WIND FARM LIMITED”

Remote Island Wind (RIW)

200

46.39

2026/27

“Orkney Community Wind Farm Project – Hoy”

Scotland

Orkney Islands Council

Remote Island Wind (RIW)

28.8

46.39

2026/27

Orkney Community Wind Farm Project – Quanterness

Scotland

Orkney Islands Council

Remote Island Wind (RIW)

28.8

46.39

2026/27

Mossy Hill

Scotland

PEEL NRE WIND FARMS (NO. 1) LIMITED

Remote Island Wind (RIW)

48

46.39

2026/27

Beaw Field

Scotland

PEEL NRE WIND FARMS (YELL) LIMITED

Remote Island Wind (RIW)

72

46.39

2026/27

Viking Wind Farm

Scotland

Viking Energy Wind Farm LLP

Remote Island Wind (RIW)

220

46.39

2026/27

Finally, one energy from waste project secured a contract, with Redcar Holdings 30MW CHP project clearing at £45.99/MWh (£43.40/MWh in today’s money).

The CfD scheme provides 15-year private law contracts from the LCCC – a government-owned company that manages CfDs at arm’s length from government – and renewable electricity generators. As the UK looks to boost its renewable capacity, the auctions will now be held annually with the next round set for March 2023.