Fair wind? How results of renewables sale add up for net zero and bill payers

Great Britain has secured enough new offshore wind to power 12m homes after the most competitive - and financially generous - subsidy auction on record.

- Jillian Ambrose Energy correspondent

The competition to secure renewable energy support contracts was considered a big test of the government's pro-growth agenda and its ambition to achieve a clean power system by 2030.

In response, Ed Miliband, the energy secretary, said the "historic auction" had proved doubters wrong. The biggest single procurement of offshore wind in the UK and mainland Europe would now bring forward investment of £22bn into the sector and create 7,000 new jobs, he added.

Here we look at how the renewable energy auction promises to help the British government meet its clean energy targets.

What is a renewables subsidy auction?

The UK pioneered the "contracts for difference" scheme, which supports new renewable electricity projects via a "reverse auction" in which the lowest bids win.

This helps to incentivise the multibillion-pound upfront costs of investing in projects such as solar, wind and nuclear power. It also helps to ensure that only those schemes that offer the best value for money receive support at the lowest cost to consumers. The latest auction is the seventh of its kind to be held in the UK in the last 11 years, with the format being replicated globally.

How does the auction work?

Over the summer, clean energy developers submitted closed bids indicating the lowest price they could accept for each megawatt produced by their project.

About 25 offshore wind projects were eligible to bid - the equivalent of more than 24 gigawatts (GW) of electricity capacity, or enough to power 20m homes when the windfarms are running at their full potential. In the end, funding was awarded to 8.4GW of capacity.

The Low Carbon Contracts Company administers the auction and contracts for the government.