The Department for Energy Security and Net Zero has announced a multi-million pound boost for renewable energy, with the aim of making Britain the ‘first choice’ for investors.
Government will continue to support renewable energy, thanks to a £22 million boost for the flagship “Contracts for Difference” scheme. This means that the total budget will rise to £227 million.
Launched in 2014, the scheme is the main way for the government to support low-carbon electricity generation, already being successful as it brings on increases to the amount of the UK’s energy generation that is coming from renewable sources. 42% of the UK’s electricity generation in 2022 came from renewables, which is a considerable increase on the 7% contribution that was made in 2010. This figure is also around double the 21% that the US contributes through renewables.
For the first quarter of 2023, the Department for Energy Security and Net Zero says that 48% of UK Electricity was generated by renewable energy, which is helping to contribute to the nation’s ambitions of a decarbonised power sector by 2035, and net zero by 2050.
Grant Shapps, Energy Security Secretary, said:
“Putin’s barbaric action against Ukraine made clear our need to do whatever it takes to bolster our energy security.
“Today’s funding through our flagship Contracts for Difference scheme – the lifeblood of our renewables industry for nearly a decade – will help grow our economy by making Britain the first choice for investors in renewable energy projects and secure skilled jobs for future generations.
“This will be the case for established technologies like solar, and new innovations like floating offshore wind and, alongside our backing for oil and gas, carbon capture and our revival in nuclear, will ensure we can help power more of Britain from Britain for decades to come.”
Annual auctions have been introduced alongside the funding increase, with this helping to boost investment in Britain’s renewable industry, whilst also contributing to energy security for the nation. This will then assist growth in green industries, as opposed to continuing to leave Britain exposed to volatile global gas prices.
The results of the new funding for the current round of auctions will be:
- An increased budget for established technologies such as solar and offshore wind – from £170 million to £190 million
- An increase n the budget for emerging technologies such as floating offshore wind – up from £35 million to £37 million
- Maintaining a £10 million ring-fenced budget for tidal stream projects.
The government is expecting the funding boost to send a ‘powerful signal’ to the industry, which is hoped will increase developer confidence in the sector and improve the UK’s reputation as one of the most attractive places to invest.
Deputy Prime Minister Oliver Dowden commented:
“Today we’ve published the latest National Risk Register, showing the many challenges we face to keep Britain safe in an uncertain world – like the risk of disruption to global energy supplies.
“Backing British renewables will tackle that risk and undermine Putin’s energy ransom. Which is why I’m with SSE in Hartlepool today as we install the first wind turbine at the new Dogger Bank offshore wind farm, generating cheap, clean energy to power millions of British homes.”
CEO of the Low Carbon Contracts Company, Neil McDermott, added:
“The £22 million boost to the Contracts for Difference (CfD) Allocation Round 5 reaffirms the government’s commitment towards transforming Britain into a global leader in renewable energy. Contracts for Difference plays a crucial role in enhancing energy security, driving economic prosperity, and propelling us towards a more sustainable future. LCCC currently manages a portfolio of 8 CfDs, and is excited to deliver AR5, furthering our vision to accelerate the delivery of Net Zero.”
Image credit: iStock
