UK to Hold 4th Renewable Auction Backed by $277 M

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The UK government is allocating £200 million ($277 million) to support offshore wind projects in the fourth and biggest-ever round of its flagship renewable energy scheme.

The Contracts for Difference (CfD) scheme is the UK government’s primary method of encouraging investment in low-carbon electricity. Launched in 2014, it is open to projects operating in Great Britain. It incentivises investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with protection from volatile wholesale prices. This in turn ensures consumers don’t pay increased costs when electricity prices are high, says the government.

Under the scheme, £265 million per year is to be provided to businesses in the fourth round of the scheme, which aims to double the renewable electricity capacity secured in the third round, when Britain allocated 5.8 gigawatts, and generate more than the previous three rounds combined. Of this, £200 million to support offshore wind projects has just been announced, expected to power about 8 million homes.

The latest round aims to ensure Britain hits a target of 40 GW of installed capacity by 2030, up from 10.4 GW at present, the government added.

It will also offer 55 million pounds to support emerging renewable technologies, with 24 million pounds reserved for floating offshore wind projects. Offshore wind turbines are now usually fixed to the seabed.

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In addition, the auction will include offering 10 million pounds to add 5 GW of more well-established renewable technologies, such as onshore wind and solar projects.

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Final levels of support and capacity could be higher and will be announced before the round opens in December, the government said.

“The new plans set out today deliver on the Prime Minister’s Ten Point Plan and will support the next generation of renewable electricity projects needed to power our homes and meet our world-leading climate change targets,” said Energy Minister Anne-Marie Trevelyan on Monday.