Engineering news
The government has unveiled details for the next Contracts for Difference auction, where companies will compete for £290 million worth of contracts for developing renewable energy projects.
The announcement came as the government reaffirmed plans to offer subsidies worth £730 million annually to renewable projects over 15 years.
The second Contracts for Difference auction will result in enough renewable electricity to power about one million homes and reduce carbon emissions by around 2.5 million tonnes per year from 2021/22 onwards.
Business and energy secretary Greg Clark said: “We’re sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure.
“This is a key part of our upcoming Industrial Strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”
The announcement has been welcomed by the industry. RenewableUK’s chief executive Hugh McNeal said: “It’s great news that the government is supporting offshore wind. This will enable our world-leading industry to deliver significant investment to the UK. The competitive auction process is continuing to drive down the cost of offshore wind energy at an unprecedented speed.
“British supply chain companies are already seizing the massive economic opportunities offered by offshore wind – and there’s great potential for further job creation by innovative companies throughout the UK as the industry continues to grow. The Supply Chain Guidance published by government today will help us to make further strides forward on this.”
The government has also launched a consultation looking to end uncertainty over whether onshore wind projects on remote islands should be treated differently from onshore wind projects on mainland Great Britain.
The government has also set out proposals for the next steps to phase out electricity generation from unabated coal-fired power stations within the next decade. The government said it could order all unabated coal plants to close by 2025, but that it could also restrict their use from 2023.
It said: “This long-term plan will provide confidence to investors that the UK is open to investors in new, cleaner energy capacity as we transition from coal to gas, and build a diverse energy system giving us greater security of supply, which includes record investments in renewable technology and the reliable electricity that new nuclear power investment will provide.”
Richard Warren, senior energy policy adviser at EEF, the manufacturers’ organisation, said: “This is a welcome announcement. Given the uncertainty over the last 18 months caused by policy chops and changes, delays in investment decisions and significant political change, industry has been crying out for some certainty and sense of direction.
“The government announced almost a year ago that it intended to phase coal power out by 2025, but there has been precious little detail on how this will be done and, what contingency plans will be in place. Today’s consultation starts to provide some of these answers but we need to see a comprehensive strategy leading from this, including better contingency plans to ensure security of supply.”
The consultation on the plans will be open until 1 February 2017, BEIS said.