UK govt to hold future CfD auctions every year, starting in Mar 2023

A turbine at Hornsea One. Image by Ørsted (orsted.co.uk)

February 9 (Renewables Now) - The UK announced today it will be holding Contracts for Difference (CfD) tenders every year, with the next one planned for March 2023.

The purpose of switching to an annual schedule from a two-year cycle is to accelerate the rollout of low-cost renewable energy in the UK, the announcement says. Also, the move will allow more projects to enter the system.

“The more clean, cheap and secure power we generate at home, the less exposed we will be to expensive gas prices set by international markets,” commented Business and Energy Secretary Kwasi Kwarteng.

“We need build up to 4GW of new offshore wind capacity every year to stay on track for net zero, which means quadrupling our current annual rate. Similar increases in onshore wind, solar and other clean power sources are vital too, as well as ramping up the roll-out of innovative technologies like floating wind, green hydrogen and marine power,” in turn said Dan McGrail, CEO of trade association RenewableUK.

To date, CfDs have supported some 16 GW of new low-carbon electricity capacity, including 13 GW of offshore wind. Allocation rounds under this programme have been held approximately every two years since they were launched in 2014. The government opened the fourth allocation round in December 2021, seeking to back up to 12 GW of renewables with an annual budget of GBP 285 million (USD 386m/EUR 338m).

According to the state, the scheme has helped reduce the per-unit price of offshore wind by about 65% since the first auctions were held.

The UK’s objective is to achieve a fully decarbonised electricity system by 2035.

(GBP 1.0 = USD 1.356/EUR 1.187)

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