Engineering news
The government is making an extra £25 million of funding available for low carbon projects in the UK through the “contracts for difference” scheme.
The system of subsidies for renewable energy was given the green light by the European Commission in July 2004. The "contracts for difference" scheme, which will pay a guaranteed price for electricity generated from projects such as offshore wind farms, with the cost added to consumer bills, aims to give investors certainty to back low-carbon generation.
Under the scheme, established renewable technologies such as onshore wind, solar farms and energy-from-waste sites will compete for a pot of £325 million - an increase of £25 million from the budget published in October. This year’s CFD budget is split between technology categories, enabling both established and less established technologies to access support.
The extra funding will increase the amount available for less established technologies, such as offshore wind and some biomass technologies, to £260 million.
Due to high levels of demand for contracts, projects will be required to compete for support through auctions which will start on 29 January.
Energy and climate change secretary Edward Davey said: “We are transforming the UK’s energy sector, dealing with a legacy of underinvestment to build a new generation of clean, secure power supplies that reduce our reliance on volatile foreign markets.
“The high demand for contracts shows that we’re one of the top places for renewables investment, and the best place in the world for investing in offshore wind.`'
The budgets for next year’s auction will be confirmed this autumn, but £50 million more has already been indicated for established technologies. Further funding is planned to be available for CFDs for renewables and carbon capture and storage in future years, rising to more than £1 billion in 2020/21.