RenewableUK Welcomes New Funding for Renewables
RenewableUK says today’s news of additional funding for renewable energy projects will provide a welcome stimulus to wind, wave and tidal projects in the UK.
The announcement by the Department of Energy and Climate Change provides an extra £300m for all low-carbon technologies to be supported under the Contracts for Difference (CfD) mechanism. This is an increase of £95m from the initial budget announced in July.
Established technologies, such as onshore wind, will now compete for £65m in annual support, up from £50m, and less established technologies, including offshore wind and marine energy will share £235m, up from the initial £155m.
This increase in the less established pot means that 700-800 megawatts of clean energy will be installed under the new budget – a boost of 200MW on the previous announcement.
The increase in budget is not necessarily reflected in potential new capacity as DECC also announced a reduction in the crucial “reference price”. This is their estimate of how much electricity will cost per megawatt hour between 2015 and 2021. When this cut of about £10/MWh is taken into consideration, it wipes out much of what’s being gained with the increased funding.
RenewableUK Director of Policy Gordon Edge said: “Today’s news is a curate’s egg. Of course the extra funding is welcome as it will help us to install much-needed extra capacity – it’s always good to see DECC putting their money where their mouth when it comes to supporting clean energy. But there’s a sting in the tail.
“The reduction in the all-important reference price of electricity means that the extra budget doesn’t go as far, so when you weigh the good news of the extra funding against the bad news on the reference price, offshore wind developers will end up only slightly better off and onshore wind developers end up in about the same place as they were under the original budget. It just goes to show that when announcements like this are made, it’s always worth reading the small print carefully to get the full picture.”