The Government will reveal the largest-ever round of the flagship renewable energy scheme on Monday, September 13, with details on how the UK will receive more electricity from the renewable sources. The Government’s major means of stimulating investment in low-carbon electricity is through the Contracts for Difference (CfD) initiative. It is accessible to projects based in the United Kingdom.
It encourages renewable energy investment by shielding infrastructure developers with high upfront expenditures and lengthy lifespans from variable wholesale prices. As a result, when electricity rates are high, consumers are spared from paying higher costs. The 4th round of the program, which seeks to quadruple the renewable electricity capacity obtained in the 3rd round and produce more than the previous 3 rounds combined, will deliver £265 million per year to businesses. The financing alone could power nearly 8 million homes with increased offshore wind generation.
The £200 million announced today will be used to assist offshore wind projects. This will enable the UK to reach its manifesto pledge of 40GW additional capacity by 2030. In addition, £55 million would be available to help emerging green technology. For the first time, £24 million has been set aside for floating offshore projects, demonstrating the government’s commitment to advancing this high-potential, cutting-edge technology.
Established technologies, comprising both the onshore wind and solar, is going to be permitted to bid for the very first time since 2015. With a £10 million expenditure, the government hopes to achieve up to 5GW of capability from these technologies. This will encourage investment across the United Kingdom, notably in Scotland and Wales. The CfD plan has aided the United Kingdom’s world-leading offshore wind industry’s success. The offshore wind industry could provide up to 60,000 employments by 2030, according to the Ten Point Plan of the Prime Minister for the Green Industrial Revolution.
The previous iteration of the CfD scheme saw record-low pricing and enough clean power to power more than 7 million homes. The competitive architecture of the scheme also safeguards consumers, as the cost of offshore wind has been cut by roughly 65 percent thanks to successive governments’ investments. As green technology progresses, these costs continue to decline, with solar and wind power now being cheaper than gas and coal in most regions of the world. The government has vowed to promote the high-quality jobs and green technology it creates prior to COP26 Climate Change Summit which will help the UK recover from the pandemic.
The Contracts for Difference plan has enabled the United Kingdom to become such a global leader in the clean electricity generation while also lowering consumer prices, according to Anne-Marie Trevelyan, the Energy Minister.
The new initiatives announced today will assist the next generation of renewable electricity initiatives required to power our households and meet the world-leading climate change ambitions, as outlined in the Ten Point Plan of Prime Minister. Contracts for CfD are given in a very competitive auction procedure, with the lowest-cost projects in every technology group receiving contracts first.
Today’s revelation establishes government funding for renewable energy projects, as well as the expected levels of power generation capacity produced under the fourth CfD round. The final amounts of capacity and support may be greater and will be published ahead of the round’s December start date.