The latest Contracts for Difference (CfD) auction has seen the UK’s offshore wind projects delivered for as low as £39.65/MWh, around 30% lower than the second auction held in 2017.
The CfD scheme is a government initiative that supports low-carbon electricity generation by incentivising investment in renewable energy through providing direct protection from volatile wholesale prices to developers of renewable projects. Successful developers are paid a flat (indexed) rate for the electricity they produce over a 15-year period.
The announcement has been deemed a landmark moment for the offshore wind industry. The cost of clean energy is continuing to fall, with the move to a low carbon future being delivered at the lowest cost to consumers.
Frank Gordon, Head of Policy at the Renewable Energy Association (REA) commented:
“We must recognise this success and the support that has got us there. However, we must also acknowledge that one type of technology is the primary beneficiary of this support. The Committee on Climate Change’s (CCC) Net Zero report stated that a combination of renewable technologies are needed to eradicate fossil fuels from the energy mix and to reach net zero by 2050; for this to happen, the government must ensure a fair and inclusive route to market for all technologies.”
With over a third of electricity generation now provided by renewables, the industry has shown it can deliver. However, we now need to see a step-change in the pace of action from the government by setting out a long-term policy framework to deliver on the newly legislated net-zero emissions target.
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