The UK Government set out further details for the next Contracts for Difference (CfD) auction today, which will allow for companies to compete for the first GBP 290 million worth of contracts for renewable electricity projects starting to generate from 2021/22 or 2022/23, including offshore wind.
In the March 2016 Budget, the Government announced GBP 730 million of annual support for renewable electricity generation over 15 years, with GBP 290 million of annual support for the next allocation round that will support offshore wind, wave, tidal, geothermal, Advanced Conversion Technologies, Anaerobic Digestion (>5W), Dedicated biomass with Combined Heat and Power projects.
The second Contracts for Difference auction will allow developers of innovative renewable technologies to deliver the best deal for bill payers. For example, the maximum price for offshore wind projects is now 25% lower than was set for the last auction, and a competitive auction could bring that price down further, the Government said.
The upcoming auction will result in enough renewable electricity to power around one million homes and reduce carbon emissions by around 2.5 million tonnes per year from 2021/22 onwards.
The application process for the Contracts for Difference allocation round will open in April 2017.
In addition, the UK Government today launched consultation on proposals to end unabated coal power generation by 2025.
Business and Energy Secretary Greg Clark said: “We’re sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.
“This is a key part of our upcoming Industrial Strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”