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In big boost for renewables, offshore wind prices in UK tumble

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David Bebber | AFP | Getty Images

The U.K. government has said that 11 new energy projects have been successful in the most recent competitive auction for renewable technologies, with the cost of offshore wind falling substantially.

In an announcement on Monday, the government said that the cost of new offshore wind projects producing electricity from 2022-23 would, at £57.50 ($75.86) per megawatt hour, be 50 percent lower than the first auction in 2015. Offshore wind projects producing in 2021-22 would come in at £74.75 per megawatt hour.

Putting the offshore wind prices in context, they are lower than the £92.50 per megawatt hour for EDF's Hinkley Point C, a major new nuclear power project currently under construction.

The renewable projects announced on Monday – which also include advanced conversion technologies and dedicated biomass with combined heat and power – were set to produce enough elecricity to power 3.6 million households, the government said.

"The offshore wind sector alone will invest £17.5bn in the UK up to 2021 and thousands of new jobs in British businesses will be created by the projects announced today," Richard Harrington, minister for energy and industry, said in a statement.

"This government will continue to seize these opportunities as the world moves towards a low carbon future, and will set out ambitious proposals in the upcoming Clean Growth Plan," Harrington added.

The results of the auction were described as "historic" by the acting head of policy at environmental group WWF Scotland.

Gina Hanrahan added that offshore wind costs were "blowing all expectations out of the water and halving in just over two years." Renewables, Hanrahan said, were "working and becoming a central part of our energy mix."

According to authorities, the U.K. has the biggest offshore wind capacity in the world, while low carbon businesses have a combined turnover of £43 billion.