The government has raised the maximum price it will guarantee to companies generating electricity from new renewable sources, in a bid to accelerate progress towards a cleaner energy system and cut household bills. The changes come ahead of the latest renewable energy auction, set to open in August, which could be one of the last opportunities to deliver projects in time to meet the UK's 2030 clean power target.

The Department for Energy Security and Net Zero confirmed an increased maximum price for offshore wind projects, now set at £113 per megawatt-hour, up from £102. Floating offshore wind sees a larger rise to £271/MWh, while onshore wind moves to £92 and solar falls to £75. These figures represent the top price developers can bid under the auction scheme – but competition is expected to drive final prices down.

Under the scheme, firms bid for contracts guaranteeing fixed prices for the energy they produce. If market rates fall below the agreed amount, the difference is covered by suppliers – ultimately affecting consumer bills. However, if market prices exceed the fixed rate, energy firms return the excess to suppliers.

The government argues these reforms will ensure a competitive process while encouraging investment in low-carbon energy. Critics, however, have voiced concern over affordability and future costs to consumers.