UK Government Awards FID Contracts to Five Offshore Wind Projects
The UK Government today awarded five offshore wind projects with Financial Investment Decision (FID) enabling contracts.
The Government today unveiled eight major renewable electricity projects, which are awarded under the Final Investment Decision (FID) Enabling for Renewables process, allocating the first Contracts for Difference (CfDs) that are being introduced through the Electricity Market Reform programme.
Under CfDs, generators and developers receive a fixed strike price for the electricity they produce for 15 years. These contracts are vital to give investors the confidence they need to pay the up-front costs of major new infrastructure projects.
The awarded projects include offshore wind farms, coal to biomass conversions and a dedicated biomass plant with combined heat and power. Among the eight selected projects, five of them are offshore wind farms: Beatrice offshore wind farm, Burbo Bank extension, Dudgeon offshore wind farm, Hornsea 1 offshore wind farm, and Walney Extension.
By 2020, the projects will provide up to £12 billion of private sector investment, supporting 8,500 jobs, and they could add a further 4.5GW of low-carbon electricity to Britain’s energy mix (or around 4% of capacity), generating enough clean electricity to power over three million homes.
Once built, the successful projects will contribute around 15TWh or 14% of the renewable electricity expected to come forward by 2020, helping to put the UK well on the way to meeting the UK’s renewable energy target. They will also reduce emissions by 10 MtCO2 per year compared to fossil fuel power generation.
Energy and Climate Change Secretary Edward Davey said:
“These contracts for major renewable electricity projects mark a new stage in Britain’s green energy investment boom.
“By themselves they will bring green jobs and growth across the UK, but they are a significant part of our efforts to give Britain cleaner and more secure energy.
“These are the first investments from our reforms to build the world’s first low carbon electricity market – reforms which will see competition and markets attract tens of billions of pounds of vital energy investment whilst reducing the costs of clean energy to consumers.
“Record levels of energy investment are at the forefront of the Government’s infrastructure programme and are filling the massive gap we inherited. It’s practical reforms like these that will keep the lights on and tackle climate change, by giving investors more certainty.”
Further CfDs will be made available in autumn and the Government intends to publish further details of the allocation process alongside the Government Response to the January Consultation on Competitive Allocation of CfDs shortly.
Press release, April 23, 2014; Image: DECC