UK Energy Secretary Ed Miliband unveiled the country’s largest-ever budget for new domestic clean energy projects to enhance energy security, provide affordable power for households, and stimulate economic growth and job creation.
Miliband announced a substantial increase in the budget for this year’s renewable energy auction, raising it by £500 million ($641 million) to a record-breaking £1.5 billion ($1.92 billion). This boost supports the development of green infrastructure, advancing the goal of achieving clean power by 2030.
A press statement by the UK’s Department for Energy Security and Net Zero said that the increased funding will expedite the delivery of affordable, low-carbon electricity generated by renewable technologies such as wind turbines and solar panels. In light of the recent cost of living crisis and the UK’s dependence on volatile fossil fuel markets exacerbated by geopolitical tensions, this investment is a key part of the government’s strategy to establish Britain as a clean energy leader.
The budget includes £1.1 billion ($1.41 billion) allocated to offshore wind—an increase greater than the combined total of all previous auctions—signaling strong support for investment in UK waters.
Energy Secretary Ed 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 increased Allocation Round 6 (AR6) budget includes £1.1 billion ($1.41 billion) for offshore wind, an increase of £300 million ($385 million), £185 million ($237 million) for established technologies such as onshore wind and solar, an increase of £65 million ($83 million) and £270 million ($346 million) for emerging technologies like floating offshore wind and tidal, an increase of £165 million ($212 million). This uplift makes the AR6 budget seven times larger than that of Allocation Round 5 (AR5).
The renewable energy sector will now compete for a share of the funding through the Government’s sixth renewable auction, known as the Contracts for Difference scheme. This scheme provides initial subsidies for clean electricity projects across Britain, designed to keep costs low for consumers. These subsidies are recouped when wholesale electricity prices exceed the agreed Contract for Difference price, as demonstrated during Winter 2022/2023 when such payments reduced government energy support costs by approximately £18 per household.
The scheme’s structure ensures that the central government’s budget remains unaffected, even with £22 billion ($28.2 billion) of unfunded pledges from the previous administration. The funding boost represents more than a 50% increase over the March budget, propelling clean energy investment, supporting high-quality jobs, and shielding household bills from volatile fossil fuel prices.
Energy Minister Michael Shanks said, “It is our mission for the UK to be more energy secure and to do that we need more renewable energy projects connected to the grid and powering our homes. Increasing the budget by more than 50% will boost industry confidence to back clean energy, attracting cutting-edge clean technologies to Britain as we accelerate to a decarbonised power sector by 2030.”