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New clean energy projects set to power 3.6 million homes

Eleven new energy projects worth up to £176m per year have been successful in the latest competitive auction for renewable technologies, the government has announced this week.

The projects, which are set to generate over 3GW of electricity, enough to power 3.6 million homes, demonstrate that the UK continues to be an attractive place to invest in clean energy.

The government is committed to investing in clean technology and driving economic growth as set out in our ambitious Industrial Strategy and upcoming Clean Growth Plan.

The competitive approach is continuing to drive cost reductions in the renewable energy industry – the cost of new offshore wind projects starting to generate electricity from 2022-23 are now 50% lower than the first auction held in 2015. The other successful technologies, Advanced Conversion Technologies and Dedicated Biomass with Combined Heat and Power, also achieved significant savings.

Competition has also driven down the costs for consumers. The capacity delivered in this auction cost up to £528m per year less than it would have in the absence of competition.

Projects are to be delivered across Great Britain from Wales to the Scottish Highlands and the West Midlands from 2021.

Minister for Energy and Industry, Richard Harrington, said “We’ve placed clean growth at the heart of the Industrial Strategy to unlock opportunities across the country, while cutting carbon emissions.

“The offshore wind sector alone will invest £17.5bn in the UK up to 2021 and thousands of new jobs in British businesses will be created by the projects announced. This government will continue to seize these opportunities as the world moves towards a low carbon future, and will set out ambitious proposals in the upcoming Clean Growth Plan.”

This investment will help the UK meet its climate targets while supporting jobs in Britain’s growing renewable industry. The UK has the largest offshore wind capacity in the world and low carbon businesses have a combined turnover of £43 billion, employing 234,000 people.

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£290 million boost for clean energy in Britain

Renewable energy developers will compete for £290m worth of contracts to support the growth of clean energy in Britain, as the second Contracts for Difference auction launches.

Contracts for Difference are won through a competitive process which drives down energy costs for consumers and guarantees companies a certain price for the low-carbon electricity they produce over 15 years. This gives them the support and certainty they need to attract investment and get projects off the ground.

The contracts made available today represent the first part of the Government’s commitment to provide up to £730m of annual support for renewable electricity projects over the course of this parliament. They support a key pillar of the Industrial Strategy by ensuring a cleaner, more flexible energy supply.

Energy Minister Jesse Norman said “This auction underlines that Britain is open for business to companies seeking to invest in low carbon energy.

“It is designed to deliver clean power to a million homes, create jobs in the energy industry and provide new supply chain opportunities, while reducing carbon emissions by some 2.5 million tonnes per year.”

The scheme is funded through a levy which forms a part of energy bills and only projects that offer the best value for money will win contracts. There is no cost on energy bills until projects are up and running and generating low-carbon energy.

The auction process started yesterday (3rd April) and will continue over the coming months. It is expected to draw to a close by the autumn, when the winners of the auction and final clearing prices will be announced.

There has been £52bn of investment in renewable energy in the UK since 2010, and for the first time ever exactly half of the UK’s electricity came from low carbon sources in the third quarter of 2016. The latest contracts will help the UK build on this success.

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Government plans to upgrade energy infrastructure and increase investment in clean energy

The Government last week reaffirmed its commitment to spend £730m of annual support on renewable electricity projects over this parliament, and set out further details for the next Contracts for Difference auction where companies will compete for the first £290m worth of contracts for renewable electricity projects.

The second Contracts for Difference auction will result in enough renewable electricity to power around one million homes and reduce carbon emissions by around 2.5 million tonnes per year from 2021/22 onwards. It will also allow developers of innovative renewable technologies to deliver the best deal for bill payers. For example, the maximum price for offshore wind projects is now 25% lower than was set for the last auction, and a competitive auction could bring that price down further.

The Government has also today set out proposals for the next steps to phase out electricity generation from unabated coal-fired power stations within the next decade. This long-term plan will provide confidence to investors that the UK is open to investors in new, cleaner energy capacity as we transition from coal to gas, and build a diverse energy system giving us greater security of supply, which includes record investments in renewable technology and the reliable electricity that new nuclear power investment will provide.

This will be of some comfort to the environmentally conscious, who fear that the recent election of Donald Trump to the position of President will undermine real progress in green technology globally. Trump has already dismissed global warming and there will be no encouragement of reducing carbon emissions under his administration.

Business and Energy Secretary Greg Clark said “We’re sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.

“This is a key part of our upcoming Industrial Strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”

These are essential elements of the Government’s plan to upgrade the UK’s energy infrastructure, lower our carbon emissions and spur on the growth of large scale, low-carbon energy – a key part of the global deal to tackle climate change agreed in Paris last year.

Taking unabated coal power out of our energy mix and replacing it with cleaner technology, such as gas, will significantly reduce emissions from the UK’s energy use. The government first announced its intention to take unabated coal out of the energy mix in November last year.

The Government is also looking to end uncertainty over whether onshore wind projects on remote islands should be treated differently from onshore wind projects on mainland Great Britain. A consultation is being launched asking for views which either support or oppose this position which will be reviewed to provide a comprehensive answer.

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