The biggest ever round of the UK government’s renewable energy support scheme opened to applications on Monday, with £285m available a year for building “the next generation” of green energy projects.
Projects across Britain could now bid for funding in the fourth round of the ‘Contracts for Difference’ (CfD) scheme, the Department for Business, Energy and Industrial Strategy said, which was aiming to secure 12GW of electricity capacity – more renewable capacity than the previous 3 rounds combined.
The additional offshore wind capacity resulting from the funding alone could generate enough electricity to power around eight million homes, the government claimed.
Compared to the previous round, the new round was open to an expanded number of renewable energy technologies, with offshore wind, onshore wind, solar, tidal and floating offshore wind projects, among others, all eligible to bid for funding in the auction process.
The government said the competitive nature of the CfD scheme had been “hugely successful” in driving the deployment of renewable energy across Britain, while “rapidly” reducing costs.
It said the scheme’s design had led to the price per unit of offshore wind to fall by around 65% between the first allocation round in 2015, and the third in 2019.
“Our biggest ever renewables auction opening today will solidify the UK’s role as a world-leader in renewable electricity, while backing new, future-proof industries across the country to create new jobs,” said Business and Energy Secretary Kwasi Kwarteng.
“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.”
A total budget of £285m a year was allocated to the fourth round, with £200m available for offshore wind, £75m for emerging technologies, such as remote island wind, tidal stream and floating offshore wind, and £10m for established technologies, such as solar and onshore wind.
Within emerging technologies, £24m a year was ring-fenced for floating offshore wind projects and £20m initially set aside for tidal stream projects, demonstrating the government’s support for new, innovative technologies that can make an important contribution to the UK’s decarbonisation commitments.
The £20m per year support for tidal stream projects represented the “biggest investment” into tidal power in a generation, kickstarting what the government called a “brand new chapter” for the tidal industry that could also have the benefit of creating jobs across the UK.
Onshore wind and solar were competing in an allocation round for the first time since 2015, with the government seeking “significant capacity” from those technologies which would help it achieve the required levels of deployment in line with meeting climate change targets.
Subject to the outcome of the competitive auction, it was expected that AR4 would be a “major step” towards delivering the government’s increased ambition to have 40GW of offshore wind by 2030, including 1GW to come from floating offshore wind, as set out in the ‘Ten Point Plan for a Green Industrial Revolution’.
