THE ENERGY Security Secretary has announced a £22 million increase in government backing for renewables through the flagship Contracts for Difference scheme – taking the total budget to £227 million for this auction.
The scheme – launched in 2014 – is the government’s main system for supporting low-carbon electricity generation and has already led to an increase in the proportion of the UK’s energy coming from renewables.
In 2022, renewables fuelled around 42% of the UK’s electricity generation – up from 7% in 2010 – compared to around 21% in the US and 23% in Japan.
In the first quarter of 2023, renewables generated a record 48% of our electricity, all making strong progress towards targets to deliver a decarbonised power sector by 2035 and net zero by 2050.
The increased funding combined with the introduction of annual auctions this year, will boost investments in Britain’s world-leading renewable industry, while strengthening the UK’s energy security, fostering growth in the country’s green industries and reducing exposure to volatile global gas prices.
The Energy Security Secretary said “This funding through our flagship Contracts for Difference scheme – the lifeblood of our renewables industry for nearly a decade – will help grow our economy by making Britain the first choice for investors in renewable energy projects and secure skilled jobs for future generations. This will be the case for established technologies like solar, and new innovations like floating offshore wind and, alongside our backing for oil and gas, carbon capture and our revival in nuclear, will ensure we can help power more of Britain from Britain for decades to come.”
The new funding for the current round (AR5) will mean:
- An increased budget for established technologies such as solar and offshore wind – from £170 million to £190 million
- An increase in the budget for emerging technologies such as floating offshore wind – up from £35 million to £37 million
- Maintaining £10 million ring-fenced budget for tidal stream projects
It is hoped that this funding boost will send a powerful signal to the industry, increasing developer confidence in the sector every year and enhancing the UK’s reputation as among the most attractive places to invest and grow the economy, with nearly 25,000 jobs directly supported by renewable electricity sectors in 2021.
The increase comes as Deputy Prime Minister Oliver Dowden visits Able Seaton Port to announce the installation of the first of over two hundred 260m tall wind turbines to be installed at Dogger Bank – becoming the world’s largest offshore windfarm. A specialised floating platform, taller than the Eiffel Tower, has been created to install the wind turbines onto the seabed.
When complete, the 277 turbines, which include British steel manufactured in Wales and processed in Corby and Hartlepool, will be capable of powering the equivalent of up to 6 million homes annually. Dogger Bank is being built in 3 phases – Dogger Bank A, B and C – by renewables developers SSE Renewables, Equinor and Vargronn.
This latest financial backing will help to replace expensive imported fossil fuels with cheaper, cleaner, domestic sources of energy. Building a more secure energy future with thriving green industries will have the knock-on effect of helping to grow the UK’s economy and create jobs across the country, with billions of pounds in private investment.
The Contracts for Difference scheme has already helped accelerate plans to diversify, decarbonise and domesticate the UK’s energy supplies, with the last round (AR4) securing around 11GW of low carbon capacity – enough to generate sufficient electricity to power 12 million British homes through nearly 100 clean technology projects.
The scheme supports the deployment of renewable power right across Britain, with the scheme so far having awarded contracts to 52 projects in Scotland, which represents around 30% of all CfD projects. In Wales, the scheme has so far awarded contracts to 9 projects, totalling around 260MW of capacity.