Renewable energy business support scheme gets £265m in latest round

The Contracts for Difference (CfD) scheme has been backed by an additional grant of £265 million, the biggest-ever round of the UK’s flagship renewable energy scheme.

Through the scheme, the government offers 15-year private law contracts between renewable electricity generators and the Low Carbon Contracts Company (LCCC), a government-owned company.

It’s the government’s primary method of encouraging investment in low-carbon electricity, and is open to projects operating in Great Britain.

The scheme aims to incentivise investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with protection from volatile wholesale prices. In turn, consumers are protected by increased costs when electricity prices are high.

This is the fourth round of funding for the initiative, and it aims to double the renewable electricity capacity secured in the third round and generate more than the previous three rounds combined. 

The bulk of the funding will go towards supporting offshore wind projects, with £200 million dedicated to businesses innovating in that field. The government hopes this will ensure the UK meets its goal of reaching 40GW of wind capacity by 2030, which it estimates will create 60,000 jobs.

The additional offshore wind capacity resulting from this funding alone could power around 8 million homes, according to government figures.

There will also be £55 million available for supporting emerging renewable technologies, £24 million of which will support floating offshore projects.

And for the first time since 2015, established technologies, including onshore wind and solar, will also be able to bid for funding. The government is seeking up to 5GW of capacity from these technologies with a £10 million budget for support.

Anne-Marie Trevelyan, the UK’s Energy Minister, said this round of funding would provide a green light for a new generation of renewable electricity projects that were needed to power homes.