The UK government has announced an increase to the Contracts for Difference Allocation Round 6 (AR6) budget. Ed Miliband, the UK's Energy Secretary, announced that the budget for this year’s renewable energy auction is being increased by £500 million to over £1.5 billion.
The Contracts for Difference scheme works by developers bidding for contracts to help deliver renewable energy projects, with the scheme providing a guaranteed price for the clean electricity they generate. This gives 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. Following the increase, the Allocation Round 6 (AR6) budget includes:
- £1.1 billion for offshore wind, an uplift of £300 million
- £185 million for established technologies such as onshore wind and solar, an uplift of £65 million
- £270 million for emerging technologies such as floating offshore wind and tidal, an uplift of £165 million
Now the budget has been set, the auction will take place in August with successful projects to be announced in September 2024.
