UK confirms £205 million budget to power more of Britain
from Britain
UK government confirms budget for
this year's Contracts for Difference scheme as it enters its first annual
auction, boosting energy security.
·
Government
announces significant financial backing for first annual flagship renewables
auction, boosting Britain’s energy security
·
£170 million
pledged for established technologies to ensure Britain remains a front runner
in renewables and £10 million ring-fenced budget for tidal
·
Scheme will
bolster investment into the sector every year, delivering clean, homegrown
energy as well as green growth and jobs
Britain’s
rollout of clean, affordable, home-grown energy is moving full speed ahead,
with the UK government offering £205 million in its latest renewables auction,
boosting energy security, growing our economy and powering more of Britain from
Britain.
The
Contracts for Difference (CfD) scheme is the government’s flagship mechanism
for supporting new British low-carbon electricity generation projects, so far
awarding contracts to projects totalling nearly 27GW of low carbon capacity.
This has helped accelerate plans to diversify, decarbonise and domesticate our
energy supplies, with the last round (AR4) securing almost 11GW of low carbon
capacity - enough to generate sufficient electricity to power 12 million
British homes.
Today’s
announcement of a budget of £205 million for the fifth CfD allocation
round – which is the first CfD auction to run annually - confirms
another year of significant financial backing by government for green
industries and jobs. This will bolster investment into the sector every year,
helping to support green energy and jobs of tomorrow, level up Britain, and
replace expensive fossil fuels with cheaper, cleaner, domestic sources of
energy.
This
includes £170 million for established technologies such as offshore wind,
ensuring Britain remains a front runner in global offshore wind, and £10
million ring-fenced budget available for tidal stream technologies, unlocking a
thriving tidal power industry here in the UK.
Building
a cleaner, more secure energy future with thriving green industries will also
help deliver on our promise to grow our economy and create good jobs across the
country, with billions of pounds in private investment and 68,000 green jobs
supported since late 2020.
The
competitive nature of the Contracts for Difference scheme has already proven
successful at placing downward pressure on prices since the first auction was
held. This process, together with solar and wind now amongst the cheapest form
or electricity generation in the UK, means the scheme will play an increasingly
important role in helping to meet the Energy Security Secretary’s ambition for
Britain’s wholesale electricity prices to be among the cheapest in Europe.
Minister
of State for Energy Security and Net Zero Graham Stuart said:
Our flagship Contracts for Difference scheme is already delivering
clean, homegrown energy as well as growing a green economy with green jobs.
Today’s
budget announcement, the move to annual auctions and continued investment in
renewable energy will limit the impact of events like Putin’s illegal war in
Ukraine and drive our overriding priority for the UK to have amongst the
cheapest wholesale electricity prices in Europe.
I am
excited to see the opportunities that will open for Britain’s world-class
renewable industries as annual auctions kick off this year, enhancing the UK’s
reputation as among the most attractive places to invest in for a secure, affordable
and prosperous future.
The
UK government continues to support the deployment of renewable power right
across Britain, with the scheme so far having awarded contracts to 52 projects
in Scotland, which represents around 30% of all CfD projects and around
25% of total CfD capacity. In Wales, the scheme has so far awarded
contracts to 9 projects, totalling around 260MW of capacity.
The
scheme is designed to be fair and deliver low carbon deployment at low-cost to
consumers – so that when wholesale electricity prices are higher than the price
agreed in the CfD, generators pay back the difference. This will be passed
on to energy suppliers and over time, is expected to translate to lower bills
for consumers.
Offshore
wind has been at the heart of the scheme and the industry is a major UK success
story thanks to Britain’s flagship CfD scheme. The UK has the
largest operational fleet in Europe, the world’s 4 biggest individual windfarms
and a world-leading ambition to deploy up to 50GW by 2030, including up to 5GW
of floating offshore wind, which the scheme continues to help deliver. As set
out in the British
Energy Security Strategy, by 2030 the UK is set to generate
more than enough electricity from offshore wind to power every home in Britain,
attracting vital investment to UK coastal communities, supporting 90,000 direct
and indirect jobs.
This follows
an unprecedented £20 billion investment into carbon capture announced yesterday
in the Spring Budget, alongside the first state backing of a nuclear project in
almost 40 years at Sizewell C and confirming the next steps for Great British
Nuclear to revolutionise how new nuclear projects are delivered in the UK.
Neil
McDermott, CEO of the Low Carbon Contracts Company (LCCC), said:
“We welcome the announcement from the government
on CfD Allocation Round 5. We look forward to working with investors
and generators for these important projects as we continue the journey to Net
Zero.”
Published 16 March 2023 on
gov.co.uk https://www.gov.uk/government/news/uk-confirms-205-million-budget-to-power-more-of-britain-from-britain
