Following the increase, the Allocation Round 6 (AR6) budget will be allocated as follows: £1.1 billion will be dedicated to offshore wind, which represents a £300 million uplift. Established technologies, including onshore wind and solar, will receive £185 million, marking a £65 million increase. Emerging technologies, such as floating offshore wind and tidal, will be allocated £270 million, an uplift of £165 million. This increase means that the AR6 budget is now seven times higher than the budget for Allocation Round 5 (AR5).

Energy Secretary Ed Miliband said that "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".

Industry will now bid for a share of the funding through the government’s sixth renewable auction – known as the Contracts for Difference scheme – which provides developers with initial subsidies for clean electricity projects across Britain with a built-in design to keep costs low for billpayers. 

Overall, the funding uplift represents more than a 50% increase on the budget previously set in March, driving clean energy investment in the UK, supporting high quality jobs in industrial heartlands and coastal communities, while protecting household bills from volatile fossil fuel prices.

UK energy industry responds 

"It’s great to see government choosing to unlock more investment in renewable energy projects by increasing the budget for the next Contracts for Difference auction. These new wind and solar farms will improve our energy security, drive economic growth, support thousands of new green jobs and ensure we continue to create a lowest cost electricity system for billpayers," RenewableUK's Chief Executive Dan McGrail said.

McGrail added that "this builds on a series of positive announcements from Government which are increasing investor confidence in the UK, including ending the ban on onshore wind in England and approving new large-scale solar farms. This auction will not unlock investment in all shovel-ready projects, so the Government will need to ensure that the next auction rounds focus on project delivery to ensure we achieve the Prime Minister's clean power mission and increase the confidence of investors in the UK's supply chain."

For his part, Chris Hewett, Chief Executive of Solar Energy UK, said that "this is further very welcome news for the solar sector, following yesterday’s consultation on planning rules and the approval of three large-scale solar farms only a week after the election. [...] While all depends on the results of the coming auction, the increased allocation should allow many more projects to go ahead, driving down carbon emissions and energy bills alike”.