October 11 (Renewables Now) - The UK government today confirmed that up to GBP 557 million (USD 735m/EUR 621m) will be made available to support less established renewables through Contracts for Difference (CfD) auctions and said the next round is planned for the spring of 2019.
The Department for Business, Energy & Industrial Strategy (BEIS) made the announcement ahead of the release this week of the government's Clean Growth Strategy. The up to GBP 557 million of CfD funding is part of the strategy, which energy minister Richard Harrington said will "set out how the whole of the UK can benefit from the global move to a low carbon economy."
The David Cameron government announced up to GBP 730 million for CfD auctions in Budget 2016 in March last year, with GBP 290 million earmarked for the first auction under that commitment. The results of this auction, the second CfD round altogether, were announced last month and saw more than 3 GW of projects, mainly offshore wind, win contracts. The budget impact of the contracts awarded was estimated at up to GBP 176 million per year.
The government pointed out today that offshore wind costs have dropped 50% in the latest auction compared to the first tender in 2015, which made it possible to secure enough capacity to power 3.6 million homes.
RenewableUK, a trade body for the wind and marine renewables industries, welcomed the new auction round and called on the government to show similar support for the wave and tidal energy industries and floating offshore wind.
James Court of the Renewable Energy Association (REA) said: “The last auction showed what government support and consistency can do for an industry, with offshore wind showing incredible cost reductions. Yet we still find ourselves in a situation where the government will support new nuclear, new gas, new diesel, yet won’t support the most cost effective technologies such as solar, onshore wind and biomass, which are still blocked to market.”
(GBP 1 = USD 1.319/EUR 1.114)