The UK government has announced support for eight major renewable electricity projects giving a big boost to green energy and green jobs. By 2020, the projects will provide up to £12 billion of private sector investment, supporting 8,500 jobs, and they could add a further 4.5GW of low-carbon electricity to Britain’s energy mix (or around 4% of capacity), generating enough clean electricity to power over three million homes.
Once completed and in operation, the projects will contribute around 15TWh or 14 percent of the renewable electricity estimated to be produced by 2020, helping to put the UK well on the way to meeting its renewable energy target. The clean energy projects will also reduce emissions by 10 MtCO2 per year compared to fossil fuel power generation.
The projects have been offered under Contracts for Difference (CfD), which form part of Government’s Electricity Market Reform programme. They include offshore wind farms, coal to biomass conversions and a dedicated biomass plant with combined heat and power.
Energy and Climate Change Secretary Edward Davey said of the announcement, “These contracts for major renewable electricity projects mark a new stage in Britain’s green energy investment boom. By themselves they will bring green jobs and growth across the UK, but they are a significant part of our efforts to give Britain cleaner and more secure energy.”
“These are the first investments from our reforms to build the world’s first low carbon electricity market – reforms which will see competition and markets attract tens of billions of pounds of vital energy investment whilst reducing the costs of clean energy to consumers,” Davey continued. “Record levels of energy investment are at the forefront of the Government’s infrastructure programme and are filling the massive gap we inherited. It’s practical reforms like these that will keep the lights on and tackle climate change, by giving investors more certainty.”
The eight projects have been awarded contracts under the Final Investment Decision (FID) Enabling for Renewables process, allocating the first CfDs that are being introduced through the Electricity Market Reform programme. Under CfDs, generators and developers receive a fixed strike price for the electricity they produce for 15 years. As a result, these contracts are vital to give investors the confidence they need to pay the up-front costs of major new infrastructure projects. The contracts are supported by the new legislative framework introduced through the Energy Act 2013. Further CfDs will be made available in the fall.