THE GOVERNMENT has announced the biggest-ever round of its flagship renewable energy scheme, Contracts for Difference (CfD).
The CfD scheme encourages investment in low-carbon electricity through renewable energy projects operating in Great Britain.
Contracts for Difference
CfD contracts are awarded in a series of competitive auctions, known as allocation rounds, which have been run every two years since 2015. In the auction process, the lowest price bids are successful, which drives efficiency and cost reduction.
£265 million per year will be provided to businesses in the fourth round of the scheme, which opens in December. It aims to double the renewable electricity capacity secured in the third round and will generate more than the previous three rounds combined. The additional offshore wind capacity resulting from the funding alone could power around 8 million homes.
Renewable Energy Capacity
The latest round of the CfD contains £200 million to support offshore wind projects with a goal of 40GW of capacity by 2030. There will also be £55 million available for supporting emerging renewable technologies. £24 million of that is ringfenced for floating offshore projects for the first time.
Other established technologies, including onshore wind and solar, will also be able to bid for the first time since 2015. The Government is seeking up to 5GW of capacity from these technologies, with a £10m budget.
The government hopes the offshore wind sector could support up to 60,000 jobs by 2030. Over the CfD scheme the price of offshore wind has been reduced by around 65%.
Energy costs continue to fall as green technology advances, with solar and wind now cheaper than coal and gas in most of the world. Ahead of the COP26 Climate Change Summit, the Government has committed to supporting green technology.