The UK’s offshore wind sector could power a £17.5bn investment in the UK economy over the next four years after faster than expected cost-cutting slashed subsidies for the technology by half.

The Government’s latest auction for support contracts, released on Monday, shows that offshore wind costs have halved in recent years to under £58 for every megawatt-hour of electricity produced, even lower than the estimates given by experts in the run-up to the results.

The lower costs mean more wind farms will be able to apply for the £294m funding pot, bringing an investment surge of £17.5bn into the UK. The boom is even greater than the £11bn predicted by Renewable UK as recently as last week.

“We knew today’s results would be impressive, but these are astounding," said Hugh McNeal, chief executive of Renewable UK. "Record-breaking cost reductions like the ones achieved by offshore wind are unprecedented for large energy infrastructure."

The Government estimates that the capacity delivered in this auction will cost consumers, who support the contracts via their energy bills, up to £528m a year less than it would have in the absence of competition.

Richard Harrington, minister for energy and industry, said: “This investment will help the UK meet its climate targets while supporting jobs in Britain’s growing renewable industry. The UK has the largest offshore wind capacity in the world and low carbon businesses have a combined turnover of £43bn, employing 234,000 people.”