Until recently, offshore wind was considered Britain’s cheapest source of electricity. However, industry sources said ministers and mandarins “ignored” the warnings. They had called on the government to raise the auction’s starting price, arguing that even at higher costs their electricity would be cheap enough to help lower household energy bills. Offshore wind developers warned that the auction’s maximum price, which was similar to previous auction rounds, was now too low for their projects to make any money. This has helped to drive down the price of renewable energy, but in recent months high inflation has caused costs across the industry to rise. The auction awards a 15-year contract to the clean energy projects that bid the lowest price for the clean electricity they go on to generate. None of the UK’s biggest offshore wind developers took part in the auction after many complained to government ministers and officials that the maximum price had been set too low. So how did things go so far wrong for Britain’s most successful clean energy sector? Why did no offshore wind developers bid?
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