A new auction for companies to bid for subsidies for offshore wind farms will take place in May next year, with auctions every two years, providing up to £557 million in support, the Business and Energy Department said.
For the first time, onshore wind farms on remote islands such as Shetland and Orkney will also be able to compete in the auctions, ministers announced.
The move could deliver up to an additional two gigawatts (GW) of offshore wind per year in the 2020s, to bring total capacity up to 30GW by 2030 from current levels of 7GW in operation, and 7GW in construction or with contracts.
That will be enough to meet more than a third of the UK’s power needs, boosting jobs and cutting costs for consumers, industry bosses said.
The auction system has seen the price for electricity from offshore wind more than halve in just a few years to as low as £57.50 per megawatt hour of power.
Industry body RenewableUK’s chief executive Hugh McNeal said: “Boosting our ambitions for offshore wind is win-win for consumers, as the industry’s success at cutting costs mean that offshore wind is now one of the cheapest options for new power in the UK.
“Today’s announcement confirming the budget and timing of new auctions, sets us on the path to deliver the tens of billions of pounds of investment that will be needed to meet our ambition of at least 30 gigawatts by 2030.
“This is good news for domestic supply chain which can look forward to a pipeline of new offshore wind projects that will support tens of thousands of jobs across the UK.”
Energy and Clean Growth Minister Claire Perry said: “The UK renewables sector is thriving, with more offshore wind capacity here than anywhere else in the world and 50% of electricity coming from low-carbon sources last year in what was our greenest year ever.
“For the last decade the Offshore wind industry has been a great British success story: increasing productivity, raising earnings and improving lives in communities across the UK; and today the sector gets the certainty it needs to build on this success through the next 10 years.”
The support for offshore wind was also welcomed by Greenpeace, but the environmental group called on the Government to support other cheap forms of renewables including onshore wind and solar power.