A Green Revolution Takes Hold
In a groundbreaking move towards bolstering the UK’s green energy sector, a record-breaking 95 clean energy projects have secured funding from the government’s flagship renewables scheme, significantly expanding the country’s capacity for clean energy generation.
The announcement, made on Friday, September 8, marks a historic step in the nation’s journey towards achieving net-zero emissions, enhancing energy security, and mitigating the impact of global gas price volatility.
Contracts for Difference – The Cornerstone of Green Energy
Launched in 2014, the Contracts for Difference (CfD) scheme lies at the heart of this initiative, guaranteeing project developers a fixed government-backed price for the electricity they generate. This assurance has provided companies with the confidence and incentive to invest in clean energy ventures within the UK.
Diverse Portfolio Powers the Future
The projects awarded funding in the latest CfD round span a diverse range of clean energy sources, including solar power, onshore wind, tidal energy, and a groundbreaking inclusion – geothermal energy.
These ventures will contribute a cumulative capacity of 3.7GW, sufficient to power approximately 2 million households, underlining the scheme’s robust commitment to building a cleaner, more sustainable future.
For the very first time, geothermal energy projects have received CfD backing. These pioneering projects harness the natural heat sources beneath the Earth’s surface to generate clean power, marking a pivotal moment in the diversification of the UK’s energy portfolio.
A Thriving Green Economy
Energy and Climate Change Minister Graham Stuart expressed his delight at the record number of successful CfD projects, emphasizing the central role of offshore wind in decarbonizing the nation’s electricity supply.
Stuart reaffirmed the government’s commitment to constructing 50GW of offshore wind capacity by 2030, including up to 5GW of floating wind, ensuring the UK remains a global leader in this vital technology.
Transforming the Energy Landscape
Underlining the immense progress achieved in the renewable energy sector, Stuart cited that renewables accounted for a mere 7% of the UK’s electricity generation in 2010. However, in the first quarter of the current year, that figure had surged to an impressive 48%.
The latest CfD round is set to further advance this transformative journey, making Britain’s energy landscape more self-sufficient.
Milestones in Clean Energy
Half of the total capacity secured in this year’s round will be generated by new solar projects. Additionally, onshore wind initiatives have added nearly 1.5 GW of capacity, more than doubling the number of projects awarded compared to the previous year.
A ringfenced budget of £10 million for tidal stream energy has resulted in a record-breaking 11 projects being funded, boasting a combined capacity of over 50MW. Furthermore, the inclusion of geothermal projects for the first time in the CfD scheme’s history will generate 12MW of capacity, equivalent to powering 2 million homes.
Offshore Wind’s Ascendancy
While offshore and floating offshore wind projects did not feature in this year’s allocation, this aligns with trends seen in other countries due to the global rise in inflation and supply chain disruptions. However, the UK remains a resounding success story in the wind energy sector, with plans intact to secure 50GW of offshore wind capacity and 5GW of floating offshore wind by 2030.
Currently, the UK boasts the world’s four largest operational wind farms and witnessed the installation of 300 new offshore wind turbines last year, with CfD contributing significantly to a total wind capacity of 29GW, powering around 24 million homes.
The UK’s Global Leadership in Offshore Wind
From 2010 to 2020, the UK attracted nearly half of all offshore wind investment in Europe, amounting to roughly £48 billion, making it the largest market for capital spending commitments. Moreover, the £160 million Floating Offshore Wind Manufacturing Investment Scheme is set to facilitate further investment in port infrastructure, enabling the large-scale deployment of floating offshore wind projects.
Future-Proofing Green Initiatives
The UK government continues to refine its approach ahead of each CfD round, introducing annual auctions to offer project developers, including those from the offshore wind industry, more frequent opportunities to participate. This agile approach enables the government to respond swiftly to the evolving needs of the sector, fostering continued investment and success.
Preparations are already underway for the sixth round of auctions in 2024, the second annual auction of its kind, with a keen focus on offshore and floating offshore wind projects.
Anticipating an influx of approximately £100 billion in private investments to support the UK’s energy transition, the government expects this initiative to generate up to 480,000 jobs by 2030, with 90,000 jobs stemming from the offshore wind sector alone.
The future looks bright as the UK advances its commitment to clean energy and sustainability.