Britain’s climate ambitions have suffered a blow after no new offshore windfarms were secured in the government’s latest clean energy auction despite there being the potential for 5 gigawatts of projects – enough to power 8m homes a year.

While it did result in contracts for a total of 3.7GW of solar power, onshore wind and tidal power projects, industry sources said the “catastrophic outcome” for the offshore wind sector put Britain’s green energy targets at risk and failed to deliver new jobs and lower energy bills.

None of the UK’s biggest offshore wind developers took part in the auction after many complained to government ministers and officials that the maximum price had been set too low.

Until recently, offshore wind was considered Britain’s cheapest source of electricity. In the government’s previous clean energy auction, developers bid £37.35 per megawatt hour (MWh) to generate offshore wind power.

But since then the industry has faced a double economic blow that has compounded costs. First, the cost of building and installing wind turbines has rocketed because the price of materials has risen sharply owing to the energy crisis. Then, the cost of borrowing money to finance the multibillion-pound projects has climbed in line with global interest rates.

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