The government has defied gloomy price expectations for its latest auction for offshore wind capacity. The worry a few months ago was that bill payers would be forced to pay more than £100 a megawatt hour (MWh) via contracts that give developers guaranteed prices for their electricity output. In the event, winning projects landed at roughly £91/MWh.
Cue some forgivable crowing from Ed Miliband, the energy secretary. “A monumental step towards clean power by 2030,” he declared. Officials pointed to calculations by the energy consultants Aurora and Baringa that £94/MWh would have been a “cost-neutral” outcome for consumers even though today’s wholesale price, usually set by gas generation, is about £81/MWh (the analysts’ reasoning is that using less gas lowers the wholesale price, offsetting the cost of the subsidies for new windfarms).
