The government has increased the maximum price it is prepared to guarantee companies generating electricity from new wind farms.
It comes as ministers are trying to meet challenging pledges to bring down household bills and create an electricity grid that it is almost entirely free of fossil fuels by 2030.
The Department for Energy Security and Net Zero published the details ahead of the latest auction for government-backed contracts.
The auction opens in August and will be one of the last which can deliver projects in time to meet the government’s target of Clean Power by 2030.
The Conservatives have described the new prices for offshore wind as “eye-watering”.
The government said the prices did not represent the final guaranteed amount, as companies will put in lower bids to win contracts.
A spokesperson for Energy Secretary Ed Miliband said “the auction will reveal the true price, just like it did last year, where the auction cleared at prices significantly lower”.
Each year, companies who want to build renewable energy projects bid for government-backed contracts.
The government agrees to pay them a fixed price for the electricity they produce for a set period, now up to 20 years, and up to a maximum price known as the Administrative Strike Price, or ASP.
Firms put in bids below the ASP to win project contracts and then the government sets a new guaranteed price, known as the clearing price, based on those.
If electricity market prices are above the price set, the companies pay the excess back to energy suppliers, with an expectation it should lower bills for consumers.
If prices fall below the guaranteed price the energy suppliers – and customers – pay the companies the difference.
This year, the maximum guaranteed price for offshore wind will be £113 per megawatt-hour, up from £102 in 2024.
Floating offshore wind, which is a newer
