The biggest ever round of the UK Government’s flagship renewable energy support scheme is opening to applications today, with £285m available a year for building the next generation of Great Britain’s green energy projects.
Renewable energy projects across Great Britain can now bid for funding in the fourth round of the Contracts for Difference (CfD) scheme, which is aiming to secure 12GW of electricity capacity – more renewable capacity than the previous three rounds combined.
The additional offshore wind capacity resulting from the funding alone could generate enough electricity to power around 8 million homes.
Compared to the previous round, this is open to an expanded number of renewable energy technologies, with offshore wind, onshore wind, solar, tidal and floating offshore wind projects, amongst others, all eligible to bid for funding in the scheme’s auction process – this will ensure we have a more secure, more resilient energy system and support the UK’s transition to net zero through a greater range of energy sources.
The competitive nature of the CfD scheme has been hugely successful in driving the deployment of renewable energy across Great Britain whilst rapidly reducing costs.
The scheme’s design has led to the price per unit of offshore wind to fall by around 65% between the first allocation round in 2015 and the third in 2019.
Business and Energy Secretary Kwasi Kwarteng said: “Our biggest ever renewables auction opening today will solidify the UK’s role as a world-leader in renewable electricity, while backing new, future-proof industries across the country to create new jobs.
“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.”
A total budget of £285m a year has been allocated to the fourth round, with £200m available for offshore wind, £75m for emerging technologies, such as remote island wind, tidal stream and floating offshore wind, and £10m for established technologies, such as solar and onshore wind.
Within emerging technologies, £24m a year has been ringfenced for floating offshore wind projects and £20m initially set aside for tidal stream projects, demonstrating the government’s support for new, innovative technologies that can make an important contribution to the UK’s decarbonisation commitments.
The £20m per year support for tidal stream projects represents the biggest investment into tidal power in a generation, kickstarting a brand-new chapter for the tidal industry that could also have the benefit of creating jobs across the UK.
Onshore wind and solar are competing in an allocation round for the first time since 2015, and the government is seeking significant capacity from these technologies which will help us achieve the required levels of deployment in line with meeting climate change targets.
Subject to the outcome of the competitive auction, it is expected that AR4 will be a major step towards delivering the government’s increased ambition to have 40GW of offshore wind by 2030, including 1GW to come from floating offshore wind, as set out in the Ten Point Plan for a Green Industrial Revolution.
Energy and Climate Change Minister Greg Hands said: “The Contracts for Difference 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.
“The previous three rounds have allowed us to push forward with the Green Industrial Revolution and this round will take us further and faster than ever before while continuing to drive down costs for consumers.”