Overview

• The UK government is shifting its offshore wind subsidy model, replacing fixed budget caps with capacity-driven targets to accelerate clean energy deployment.
• The move comes after Ørsted’s cancellation of the 2.4 GW Hornsea 4 project, citing rising costs and feasibility concerns.
• Energy Secretary Ed Miliband aims to meet the Clean Power 2030 target of 95% carbon-free electricity, requiring up to 50 GW of offshore wind capacity.
• Analysts warn achieving this target could cost up to £11 billion annually, potentially increasing household energy bills by £135 per year.
• The next Contracts for Difference auction in July will test the new framework, as industry leaders call for policy stability to maintain investor confidence.