On Monday 13 December 2021, the Department of Business, Energy & Industrial Strategy (BEIS) released its biggest ever renewable energy funding package for the fourth round of its Contracts for Difference (CfD) programme.
The CfD is the UK Government’s flagship renewable energy support scheme, and this round of funding will allocate £285 million a year toward new projects, including offshore wind, tidal stream, floating offshore wind, solar and onshore wind. The aim is for it to support 12GW of new capacity which is the electricity equivalent to powering around 8 million homes. It is also more renewable capacity than the previous three rounds combined.
Energy and Climate Change Minister Greg Hands stated that: “The CfD 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.”
This funding from the government should enhance the UK’s transition to net zero with a more diverse range of energy sources and ensure a more secure and resilient energy system. To that end, Business and Energy Secretary Kwasi Kwarteng said “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.”
The announcement has been welcomed by the low-carbon electricity generation sector with the RenewableUK CEO Dan McGrail remarking “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.”
Low Carbon Contracts Company CEO Neil McDermott also said “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.”
The deadline for submitting details of the projects will be 14th January 2022, and the auction results are expected to be announced in the summer of 2022.
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