Up to £557 million (€622.95 million) will be made available for the "next clean electricity auctions for less established renewables", the government department confirmed.
The announcement comes ahead of the UK government publishing its delayed Clean Growth Strategy, which is due to be released this week.
It follows the UK’s second renewables auction which saw two offshore wind projects awarded contracts for difference (CfD) deals at £57.50/MWh (€64.10/MWh) in September — a 50% cost reduction from contracts awarded two and half years earlier.
The £57.50/MWh strike price was also significantly cheaper than that for the UK’s Hinkley Point C nuclear power plant — £92.50/MWh (€101.49/MWh) — which is currently under construction in Somerset, England, but behind schedule and over-budget.
Energy Minister Richard Harrington said: "The government’s Clean Growth Strategy will set out how the whole of the UK can benefit from the global move to a low carbon economy.
"We’ve shown beyond doubt that renewable energy projects are an effective way to cut our emissions, while creating thousands of good jobs and attracting billions of pounds worth of investment."
Trade body RenewableUK welcomed the announcement and called on the government to further push other less established renewable energy sources.
"This announcement secures cheap, home-grown, clean energy for the UK," said CEO Hugh McNeal. "[The] department is helping to build a world-leading offshore wind industry, which can power a clean industrial revolution, creating new jobs and attracting billions of new investment.
"Now we need the government to show the same level of commitment to our cutting-edge wave and tidal energy industries. Innovative floating offshore wind technology also offers new opportunities."