Britain will offer record support for new offshore wind farms in an upcoming auction as the government tries to make up ground after the process failed to draw any bidders for the technology last year.

The government set a budget of just over £1 billion (S$1.7 billion) for renewable energy, with £800 million a year to support the next generation of offshore wind farms, according to a person familiar with the matter who asked not to be identified because the matter is private. The total figure is triple any previous budget.

Britain has led the world in subsidising offshore wind to help the industry scale up and bring down costs. It plans to triple its fleet of the giant renewable power parks by the end of the decade to help cut carbon emissions and increase energy security. But those plans have come up against rising costs that may end up tagged onto consumers’ bills. 

A Treasury spokesperson declined to comment.

The numbers are an estimate of the total annual support that wind farms eligible for the country’s main subsidy mechanism, known as contracts for difference, will receive to allow them sell power at guaranteed prices. 

That increase comes after an auction last year failed to lure any bidders because the price to sell power offered by government was too low. The contracts guarantee recipients will be able to sell electricity at fixed prices over a 15-year period. If the market price is below the contract price, then the operators receive a top up. But if the market price rises high enough, then the wind farms will pay money back to consumers. 

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The budget is based on factors including the capacity the government expects to procure, what price wind farms will bid to sell power and what the wholesale price of power will be in the future. For the next auction, the maximum guaranteed price will be £73, up from £44 last year, not accounting for inflation. BLOOMBERG