Jun 9, 2014 - The UK government has signed contracts for 4,548 MW of renewable energy capacity under the Contracts for Difference (CfD) programme, energy minister Michael Fallon said on Thursday.
According to the written statement to parliament, published on the Department of Energy & Climate Change’s (DECC’s) website, the eight renewable projects that got the contracts will generate up to GBP 12 billion (USD 20.2bn/EUR 14.8bn) of private sector investment by 2020 and support about 8,500 jobs. The CfDs are part of the government’s electricity market reforms and will enable developers to take “final or other critical investment decisions.”
Under the CfD scheme, generators and developers receive a fixed strike price, or power purchase price, for the electricity they produce for 15 years. The system will replace the renewable obligation (RO) for all new renewable projects from April 2017.
The 4,548 MW of winning proposals include five offshore wind projects, two biomass conversion schemes and one proposal for dedicated biomass with combined heat and power. The list includes Beatrice Offshore’s 664-MW wind project in the Outer Moray Firth in Scotland, Danish state-owned utility Dong Energy A/S’s 258-MW Burbo Bank extension offshore wind plan in the UK, and the 400-MW Dudgeon wind farm in UK waters proposed by Statoil ASA (NYSE:STO) and Statkraft AS. There are two more offshore wind schemes -- Dong’s 1,200-MW Hornsea and 660-MW Walney Extension off Cumbria. Meanwhile, UK power producer Drax Group (LON:DRX) is converting to biomass 645 MW of coal-fired power generators at the Drax power station at Derby, while Lynemouth will convert 420 MW of capacity into biomass at the Lynemouth Power Station. MGT Power’s 295-MW Teesside Renewable Energy plant is the dedicated biomass with CHP winner.
Once operational, the eight renewable energy facilities will generate about 15 TWh of electricity per year, or around 14% of the UK’s total power production.
(GBP 1.0 = USD 1.681/EUR 1.232)
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