Electricity generated by renewable sources and nuclear power will be the foundation of the UK’s electricity system by 2030, according to a new action plan the UK government issued in December 2024. Offshore wind, which now accounts for some 17 per cent of the country’s electricity generation, has “a particularly important role as the backbone of the clean power system”, the government said, revealing plans to make part of the path to building offshore wind farms easier as soon as before the Contract for Difference (CfD) round planned for the summer.
The action plan, issued by the Department for Energy Security and Net Zero (DESNZ), was presented by the UK Energy Secretary Ed Miliband on 13 December and is said to be a “major milestone to deliver on the Prime Minister’s Plan for Change which aims to drive economic growth and rebuild Britain with mission-driven government”.
Clean Power 2030 Action Plan is a roadmap to an (almost) fully clean power system in the UK by 2030, with clean sources making up 95 per cent of Great Britain’s electricity generation with gas being used for no more than 5 per cent of total generation.
“Unabated gas will continue to play a back-up role throughout the transition to clean power, ensuring security of supply. This means that we will retain sufficient capacity until it can be safely replaced by low carbon technologies” , the action plan reads. “Over the period to 2030, security of supply will be protected with the maintenance of an expected 35 GW of unabated gas reserve capacity.”
In 2023, gas provided 35 per cent of the UK’s electricity generation and offshore wind was the second-largest source at 17 per cent , followed by nuclear at 14 per cent.
Now, the UK government wants to make renewable energy, offshore wind in particular, and nuclear the cornerstones of the 2030 energy mix with 43-50 GW of offshore wind in operation. Currently, the UK has 14.8 GW across offshore wind farms built and a further 16 GW capacity contracted or under construction.
“The government will therefore seek to secure at least 12 GW across the next 2 to 3 allocation rounds – AR7, AR8 and, depending on the speed at which projects deploy, AR9”, DSNEZ says in the main report of the Clean Power 2030 Action Plan.
To achieve this goal, the UK government will also introduce targeted reforms to the Contracts for Difference (CfD) mechanism and these are expected to be in force already ahead of the next CfD round, Allocation Round 7 (AR7).
One of the reforms will be to relax eligibility criteria for fixed-bottom offshore wind farms so projects that have yet to obtain full planning consent can participate.
“This would award CfDs at an earlier stage in the offshore wind development cycle compared to the current model. Coupled with wider reforms, this could improve competition and enable earlier supply chain engagement”, the action plan reads.
The government also plans to change what information the Secretary of State uses to inform the final budget for fixed-bottom offshore wind, to avoid a repeat of AR5.
The reforms also include implementing an auction schedule, comprising capacity ambitions for upcoming allocation rounds, and a review of auction parameters, including the approach to Reference Prices used to estimate the budgetary impact of projects bidding into allocation rounds.