Offshore wind power warning as government auction flops
Insiders say the process has struggled to attract bidders because the government has set the maximum price generators can receive as too low, failing to reflect the rising costs of manufacturing and installing turbines.
Energy industry leaders have warned the UK could fall behind a key target for new offshore wind power ahead of the results of a government auction that is widely expected to flop.
Multiple industry sources have told Sky News the auction, the results of which are expected to be announced on Friday, has received little or no interest.
Insiders say the process has struggled to attract bidders because the government has set the maximum price generators can receive as too low, failing to reflect the rising costs of manufacturing and installing turbines.
The industry has been hit by inflation that has seen the price of steel rise by 40%, supply chain pressures and increases in the cost of financing.
Several companies, including the UK's largest renewables generator SSE, have ruled themselves out of the auction, with one source saying the number of potential bidders was "between two and zero, with expectations at the lower end of that range".
The renewables auction is an annual process in which the government attempts to incentivise private sector investment in a range of power sources through a mechanism known as "contracts for difference" (CfDs).
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