Ministers increase “strike price” paid to onshore and offshore wind farms for each megawatt-hour of electricity they generate.
Onshore and offshore wind farms are to receive subsidies on the energy they generate of at least £100 and £155 per megawatt-hour (MWh) respectively, with the going rate for electricity currently at around £50/MWh.
The subsidy will be in place for the next six years, falling slightly in 2018.
The strike price for onshore wind farms is increasing from around £90 per MWh to £100 per MWh, with offshore rising from £130 per MWh to £155 per MWh.
The deal has been described by City analysts as “astonishingly expensive”.
These rates for onshore and offshore wind will fall to £95 and £135 respectively, in 2018.
The government has still not agreed a strike price on nuclear power with EDF Energy, who are still in talks to build a fleet of 18 new nuclear reactors in the UK.
With britain’s energy security possibly at risk, it is hoped that the increased strike price on wind farms will help to encourage investment in the renewables sector.
Chief executive of RenewableUK Maria McCaffery said the subsidy would still make it “challenging” for wind companies to make a profit.