Government boosts funding for less established renewable technologies as auctions for CfD contracts commences
Following higher levels of demand for projects to be supported under the new Contracts for Difference (CfD) regime than originally anticipated, the Government has announced a further £25million will be made available under the first round of auctions for developers bidding to receive approval for schemes using less established technologies.
The auctions, which commenced on 29 January, will see developers submit sealed bids for support for projects that would have previously been funded through the Renewable Obligations Certificates regime, which is being phased out for larger schemes. This is in an attempt to drive down the cost of renewables support, and it is estimated that the average household electricity bill will fall by around £41 over the period 2014 to 2030 as a result.
The additional funding will be allocated to offshore wind and some biomass technologies, taking the total funding available for less established technologies to £260million for projects commissioned from 2016/17 and 2017/18 onwards. It is envisaged that the UK renewables sector will see a greater diversity of low carbon energy supplies as a result.
Energy and Climate Change Secretary Edward Davey said:
“We are transforming the UK’s energy sector, dealing with a legacy of underinvestment to build a new generation of clean, secure power supplies that reduce our reliance on volatile foreign markets.
“The high demand for contracts shows that we’re one of the top places for renewables investment, and the best place in the world for investing in offshore wind.
“Renewable electricity generation and investment have both more than doubled since 2010. We attracted a record breaking £10 billion worth of investment in 2014 and by making projects compete for support, we’re ensuring consumers get the best possible deal as well as a secure and clean power sector.”
The increase comes as the budget for established technologies (onshore solar and wind) to be commissioned from 2015/16 under the CfD regime set at a significantly lower figure of just £50 million, demonstrating a clear statement of intent from Government that the pendulum has swung in favour of developers looking to build projects that to date have been less commonplace in the UK.
The bidding process for the 15-year contracts will close on 6 February.