In the first annual Contracts for Difference round, a total of 95 clean energy projects were successful with their bids
The renewables scheme is set to deliver 3.7GW of clean homegrown energy. (Credit: Jukka Niittymaa from Pixabay)
A historic number of clean energy initiatives have secured funding under the UK Government’s leading renewable energy programme. This initiative is poised to bolster the UK’s economic growth, advance the pursuit of net-zero emissions, safeguard households and enterprises from the unpredictable fluctuations in global gas prices, and enhance energy security.
In the inaugural annual Contracts for Difference (CfD) round, an impressive 95 clean energy projects have triumphed with their proposals, marking an increase from the 93 projects selected in the prior round. The most recent round, which allocated a budget of £227m, has successfully secured the capacity to generate electricity equivalent to powering 2 million homes.
It recorded a substantial allocation of funding for numerous solar power and onshore wind initiatives, coupled with a surge in support for tidal energy projects. In a groundbreaking development, geothermal projects, which harness natural subterranean heat sources to generate power, have also achieved success.
Launched in 2014, the Contracts for Difference programme guarantees project developers a set price for the electricity they generate, courtesy of the government. This assurance empowers companies with the certainty and confidence needed to invest in the UK.
The allocation of contracts occurs through a competitive auction process, with the lowest-priced proposals securing success, ensuring cost-effectiveness for consumers. This year’s auctions have been stratified, ensuring that emerging and less established energy sources do not have to vie for funds against well-established technologies. This approach provides assurance to developers and maintains the UK’s position at the forefront of the renewable energy sector.
UK Energy and Climate Change Minister Graham Stuart said: “We are delighted that our first annual Contracts for Difference auction has seen a record number of successful projects across solar, onshore wind, tidal power and, for the first time, geo-thermal.
“Offshore wind is central to our ambitions to decarbonise our electricity supply and our ambition to build 50GW of offshore wind capacity by 2030, including up to 5GW of floating wind, remains firm. The UK installed 300 new turbines last year and we will work with industry to make sure we retain our global leadership in this vital technology.
“This year’s record breaking CfD round builds on years of renewables growth under this government. Just 7% of our electricity came from renewables in 2010, yet in the first quarter of this year it reached 48% and this first annual auction will allow us to go further in powering more of Britain from Britain.”
New solar projects have successfully secured half of this year’s total capacity, showcasing their increasing prominence. Onshore wind projects, on the other hand, have delivered an impressive 1.5GW of capacity, doubling the number of projects awarded contracts compared to the previous year’s round (24 compared to 10). Notably, this latest round has also earmarked a £10m ringfenced budget to support tidal stream projects, resulting in a record-breaking 11 projects receiving funding, with a cumulative capacity exceeding 50MW. Additionally, this marks the first time in the scheme’s history that three geothermal projects have won contracts, boasting a combined capacity of 12MW.
It’s worth noting that offshore and floating offshore wind projects did not secure allocations in this year’s round, aligning with similar outcomes in countries like Germany and Spain. This outcome can be attributed to the global surge in inflation and its impact on supply chains, which posed challenges for projects participating in this round.