With energy bills set to rise 10% over the winter months, the UK Government has announced funding for a series of projects promoting green energy, including the award of nine new offshore wind farm contracts. Combined the projects have the potential to fuel 11 million UK homes, but experts are sceptical as to whether they will be effective enough to meet renewable energy targets set for 2030.

Over 131 contracts were issued to firms that included those generating tidal and solar power, with the expectation that they would generate 9.6 gigawatts (GWs). It represents a huge boost to the energy sector. Last September, when contracts for offshore wind farms went on auction, there were no bids. Firms said that the price for electricity offered by the Conservative Government was insufficient as it didn’t cover the costs affected by inflation, such as construction materials. Today’s news shows that the industry has the capacity to develop.

According to Keith Anderson, chief executive of Scottish Power whose parent company Iberdrola accepted a contract to extend its East Anglia wind farm, the contracts ‘will allow investment into manufacturing in the UK.’ Energy Secretary Ed Miliband said that despite inheriting ‘a broken energy policy’ today’s auction was a ‘significant step forward.’

However, Pranav Menon of Aurora Energy Research claims that the Government is still off track when it comes to its ‘ambitious’ energy targets. The goal is to produce 60GW of energy through offshore wind farms by 2030. The projects announced today are expected to have the capacity to generate 4.9GW. Menon pointed out that next year’s auction would be the last chance for the government to secure the missing 31GW before the deadline.

Some of the projects announced today also represented projects that had already been approved, but that firms re-bid for to secure better prices for their energy product.

It may be some time before consumers feel the benefits of these changes. While the hope is that projects like the ones confirmed today will eventually lower energy costs and help the UK be less reliant on overseas suppliers (such as Ukraine), the expectation in the short term is for energy prices to continue to rise after Ofgem lifted the price cap on gas and electricity.

(Sources: bbc.co.uk)