United Kingdom – The largest ever round of the UK government’s signature auction scheme resulted in the procurement of a record amount of renewable energy.
The fourth round of the Contracts for Difference (CfD) program was the most successful yet, securing almost 11 GW across a variety of clean technologies, including offshore wind, solar, onshore wind, and – for the first time ever – floating offshore wind and tidal stream. This helps to increase British energy security and independence by generating cleaner, more affordable, and more diverse energy in the UK.
CfDs shield project developers from fluctuating wholesale prices, allowing them to invest with confidence in new renewable energy infrastructure. When wholesale electricity prices are high, as they have been in recent months, generators pay money back into the program to lower the program’s net costs to consumers. This is a unique benefit of the CfD program.
The largest capacity, nearly 7GW, has been secured from new offshore wind projects off the coast of Great Britain. This amount is enough to increase the nation’s total built and under construction capacity by 35% and move the country significantly closer to the government’s goal of 50GW of offshore wind by 2030. Prices have been under pressure due to the competitive nature of the scheme; the price of offshore wind per unit (MWh) secured in this round is nearly 70% less than that secured in the first allocation round, in 2015.
Onshore wind and solar incorporated
For the first time since 2015, onshore wind and solar energy were both incorporated into a CfD auction. Solar secured more than 2.2GW, while onshore wind secured nearly 0.9GW of new capacity, clearing at a price per unit that was more than 45 percent lower than in the first CfD round in 2015.
Tidal stream and floating offshore wind projects both achieved their first successes in the fourth round, which also saw the development of these technologies. The capacity of the tidal stream was 41 MW, and the capacity of the offshore floating wind was 32 MW.
In total, 93 projects in England, Scotland, and Wales with current planning permission have been awarded contracts through the competitive auction process, which is more than in the previous three rounds combined.
Supporting jobs
This strengthens the UK’s position as a global leader in renewable electricity, encouraging investment in fresh, future-proof industries, generating skilled employment, and assisting in the nation’s effort to lower emissions. The outcomes also show that the British Energy Security Strategy is making progress toward its goals, including one that calls for the offshore wind industry to support about 90,000 high-skilled jobs in Great Britain by the end of the decade.
The fourth CfD round has delivered energy from more renewable technologies than ever before, helping to ensure a more secure, more resilient energy system. It has also secured a record level of clean electricity generation capacity.
It is a significant step toward realizing the goals set forth in the British Energy Security Strategy, which is for Great Britain to be powered by less expensive, dependable, domestic energy sources. Increased use of renewable energy will significantly lessen the nation’s exposure to the erratic global prices for fossil fuels, which are driving up energy costs for millions of households.
The British Energy Security Strategy, developed by the government, outlines how the country will speed up the adoption of renewable technologies with the goal of having 95 percent low-carbon electricity by 2030. By supporting 90,000 jobs in offshore wind by 2030, the strategy also outlined a higher ambition for the number of clean jobs in the United Kingdom.
