23.04.14
Renewable projects to heat 3 million homes by 2020
Eight renewable energy projects, which are expected to support over 8,000 jobs, have been given the green light by the government.
The contracts, which include offshore wind farms and conversions of coal-powered plants to run on biomass, are the first awarded under the government's energy market reforms.
Each project will receive one of the government's Contracts for Difference (CfDs), which effectively guarantee prices for renewable energy suppliers.
By 2020, the projects will provide up to £12bn of private sector investment, could add a further 4.5GW of low-carbon electricity to Britain’s energy mix (or around 4% of capacity), and power over three million homes.
Ed Davey MP, energy and climate change secretary, said: “These contracts for major renewable electricity projects mark a new stage in Britain’s green energy investment boom.
“By themselves they will bring green jobs and growth across the UK, but they are a significant part of our efforts to give Britain cleaner and more secure energy.
The eight successful projects have been awarded contracts under the Final Investment Decision (FID) Enabling for Renewables process, allocating the first CfDs that are being introduced through the Electricity Market Reform programme. Under CfDs, generators and developers receive a fixed strike price for the electricity they produce for 15 years.
The CfD regime, which replaces the Renewables Obligation, and in addition gives financial support to Carbon Capture and Storage and nuclear projects, was set up under the 2013 Energy Act, and provides a guaranteed price for power, with the government providing a premium on top of the power price to make low carbon projects economic. The Renewables Obligation will cease in March 2017 when the CfD will be the sole mechanism for support. The DECC added that further CfDs will be made available in the autumn.
Of the projects announced today, five offshore wind projects have progressed – four in England and one in Scotland. Maf Smith, RenewableUK’s deputy chief executive, said: “We’re pleased to see this vote of confidence in these five offshore wind projects, which will make an important contribution to keeping the lights on, and create much-needed growth in coastal areas.
“We could see over 100,000 people working in the wind and marine energy sector over the next decade, and government backing here will give the supply chain confidence to invest in the UK, with costs falling as the clean energy industry develops and scales up.”
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