The UK government has announced the largest renewable energy support scheme to date, which opens with £285m funding available for low-carbon technology each year.
Today – Monday 13 December – marks the opening of applications for the biggest ever round of the UK government’s flagship renewable energy support scheme, with £285m available a year for building the next generation of the UK’s green energy projects.
Contracts for Difference scheme
Renewable energy projects around the UK can now bid for funding in the fourth round of the Contracts for Difference (CfD) scheme, which is seeking to obtain 12GW of electricity capacity, which is more renewable capacity than the previous three rounds combined.
The additional offshore wind capacity stemming from the funding has the potential to produce enough electricity to power around eight million homes.
In comparison to the previous round, this is open to an extended number of renewable energy technologies, such as offshore wind, onshore wind, solar, tidal and floating offshore wind projects. All of these are eligible to bid for funding in the scheme’s auction process, which will safeguard a more secure and resilient energy system, as well as supporting the UK’s transition to net zero through a greater range of energy sources.
World-leading renewable energy
Business and Energy Secretary Kwasi Kwarteng added: “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.
“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.”
Energy and Climate Change Minister Greg Hands said: “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 previous three rounds have allowed us to push forward with the Green Industrial Revolution and this round will take us further and faster than ever before while continuing to drive down costs for consumers.”
Towards a net zero future
RenewableUK CEO Dan McGrail commented: “This is set to be a landmark auction securing the largest amount of new renewable energy capacity so far, as ministers have listened to our calls for the overall capacity cap to be lifted to reflect the enormous appetite among companies and investors in UK projects.
“More than 16GW of wind could be ready to compete and over 23GW of renewables overall. We could see investment of over £20bn in this round, creating thousands of jobs and cutting costs for energy consumers.
“We need a range of renewable technologies to get us to net zero as fast as possible, so it’s great to see the development of innovative floating wind and tidal stream projects supported by ring-fenced funding, as we’ve been advocating. This will enable us to ramp up the roll-out of these cutting-edge technologies, building up massive industrial opportunities for the future, including exports.”
Building on COP26
Low Carbon Contracts Company CEO Neil McDermott concluded: “We’ve been supporting new low-carbon power projects through the CfD scheme since its inception, so we’re incredibly excited to see what the next Allocation Round brings. The current CfD portfolio features projects located across the length and breadth of Great Britain, including some of the world’s largest offshore wind farms to date.
“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.
“We’ve learned a fantastic amount to date and we stand ready to support the ambitious infrastructure that will power the UK’s transition to Net Zero emissions by 2050, as well as protecting the long-term health of our environment, economies and societies.”