This week, the UK Government opened its biggest ever renewable energy support scheme.
The Department for Business, Energy & Industrial Strategy wants 8 million UK homes to be powered by green energy. How? By offering £285 million a year funding for low-carbon technology.
The Contracts for Difference scheme aims to secure 12GW of electricity capacity. As a result, the scheme is open to a number of renewable energy technologies. These include offshore and onshore wind, solar, tidal, and floating offshore wind projects. The competitive nature of the CfD scheme has been hugely successful in driving the deployment of renewables. Plus, rapidly reducing costs. Between the scheme’s first round in 2015, and third, in 2019, it has led to the price per unit of offshore wind falling by 65%. Equally, £24 million has been ring-fenced for floating offshore wind projects. An additional £20 million is earmarked for tidal stream projects. Those working in offshore wind, emerging technologies, and established technologies such as solar and onshore wind can also vie for a share.
By supporting new, innovative technologies, the government wants to make a significant contribution to the UK’s decarbonisation commitments. Kwasi Kwarteng, Business and Energy Secretary explained, “By generating more renewable energy in the UK, we can ensure greater energy independence by moving away from volatile global fossil fuel prices, all while driving down the cost of new energy.” The Energy and Climate Change Minister, Greg Hands was vocal about the potential positive economic benefits too. He commented, “The Contracts for Difference scheme is proof that green and growth go hand-in-hand, as it continues to be a key driver behind the world-leading renewable energy sector that is providing us with secure clean energy, creating jobs across the UK and opening investment and export opportunities.
The funding round has been positively received by the renewables industry experts. Neil McDermott, CEO of Low Carbon Contracts Company, said, “We’ve seen the scheme’s impact on diversifying and increasing the investment needed to support vital new low-carbon power, and this year’s COP26 only served to underline the critical timing of this round.