Can Labour take credit for ‘record-breaking’ clean energy auction?

A social media post released by Secretary of State for Energy Security and Net Zero Ed Miliband on 3 September hailed the “record-breaking results of our renewables auction”.

And in a separate post, he said: “Last year, the Conservatives oversaw a disastrous result—with ZERO new offshore wind projects. Labour came in and fixed this. The results are power for over 11 million homes with a new supply of clean homegrown energy.”

While it is true that 131 new clean energy projects emerged from the latest renewables auction round, Mr Miliband’s claim does not tell the whole story. Applications for this auction round were submitted in April 2024, before the Labour government came into power in the July general election, with the auction then taking place in August. 

An increase in the maximum ‘strike price’ companies are allowed to charge, which again happened before Labour took power, was also a likely factor in the auction’s outcome. As others have pointed out, this means the new government cannot take full credit for the outcome, even though it did increase the auction’s overall budget, which likely affected the total number of projects. 

Claims about government policies and activities that are missing important context have the potential to affect people’s opinions of politicians and how they choose to vote.

Why did this auction attract more bids?

Mr Miliband’s post on X referred to the results of the sixth allocation round (AR6) of the Contracts for Difference (CfD) scheme, which opened in March 2024. 

CfDs are the government’s main mechanism for supporting new low carbon power infrastructure, and work by guaranteeing a set amount, known as the “strike price”, for electricity that generators receive per unit of power output. 

Under CfDs, if power prices fall below the price agreed at auction, the government makes up the difference. Should prices go above the agreed figure, the generator returns the excess to the suppliers and ultimately consumers. In either case, the cost, or benefit, is passed on to consumers through their bills.

The fifth CfD auction round, which opened in March 2023, failed to attract any bids from offshore wind developers. At the time the Conservative government was accused of setting the maximum price generators could receive too low, failing to reflect the increasing costs of manufacturing and installing turbines.

As a direct result, in November 2023, the then-government announced it would raise the maximum price of offshore wind subsidies by around two-thirds from £44 to £73 per megawatt hour (at 2012 prices) to encourage more developers to participate. 

A further change that was implemented by the incoming Labour government was to raise the overall CfD auction “budget” to more than £1.5 billion, an increase of more than £500 million compared to AR5. What followed was the “record breaking” auction to which Mr Miliband referred to in his post. 

A spokesperson for the Department of Energy Security and Net Zero told Full Fact that, while the increase in the maximum strike price was “important”, it was the decision to increase the budget that “facilitated” the final result. “If the budget weren’t large enough, not as many projects could have come through,” she said.