The government has set targets for major increases in renewable power to help increase Britain's energy security and meet climate targets.
To help ensure projects are built, it holds annual auctions offering renewable power developers a guaranteed price for their electricity.
"The government is providing clarity and certainty for investment into the UK’s renewables sector... setting the largest ever budget for a single round of over 1 billion pounds," the budget document said.
The auction, which will be the sixth of its type, will open to bidders from March 27, a separate document published by the Department for Energy Security and Net Zero said.
The budget for the sixth round is significantly higher than the last auction, held in 2023, which had a budget of 227 million pounds.
The 2023 auction failed to attract any bidders for offshore wind projects as developers deemed the guaranteed prices offered too low, dealing a blow to the country's aspirations of growing its offshore wind capacity to 50 gigawatts (GW) by 2030 from around 14 GW now.
A total of 800 million pounds of the sixth auction budget is earmarked for offshore wind projects.
Analysts at Aurora Energy Research said some 14 GW of offshore wind capacity was expected to be eligible to bid in the auction, but that even with the higher budget, it was unlikely to all be successful.
"This budget pushes the ambition of delivering 50 GW offshore wind by 2030 even more out of reach," said Ashutosh Padelkar, Associate for GB Power & Renewables at Aurora via email.
He said that based on the price parameters, a maximum of around 6 GW was likely to be successful.
"I expect the auction to be hugely competitive. Given the scale of the available pipeline... we would encourage the government to revisit the budget in the light of developments," Keith Anderson, CEO of Iberdrola-owned renewable power developer ScottishPower, said via email.
