Photo: Department for Business, Energy & Industrial Strategy (BEIS) (Courtesy of UK Government)

UK doubles renewable energy ambitions with 12GW planned for next CfD round

The UK government has set out plans to support up to 12GW of new renewable energy capacity in the fourth round of the Contracts for Difference (CfD) scheme that will open late in 2021, with both bottom-fixed and floating offshore wind, as well as tidal stream projects eligible to bid.

Department for Business, Energy & Industrial Strategy (BEIS) (Courtesy of UK Government)
Department for Business, Energy & Industrial Strategy (BEIS) (Courtesy of UK Government)

The fourth CfD round aims to increase the capacity of renewable energy from the 5.8GW achieved in the last round, with three pots established for different technologies to compete for 15-year government subsidized contracts.

Given its long-term potential to support UK’s 2050 net zero target, offshore wind projects will compete in their own designated ‘pot 3’ in the next auction process rather than against other technologies as they have previously.

Floating offshore wind projects will be able to bid for contracts for the first time as part of the ‘pot 2’ section, which has been assigned for less-established technologies, that also includes Advanced Conversion Technologies and tidal stream.

Solar and onshore wind projects will be able to bid for the first time since 2015, under the ‘pot 1’ part for established technologies.

The 2021 CfD round will be coupled with a new consultation looking at the supply chain and the proposals that would help support more jobs and private investment by increasing the competitiveness of UK manufacturers.

The proposals have been designed to increase the clarity, ambition and measurability of commitments made by renewable project developers when they bid for contracts in the CfD scheme, and to introduce new measures if they subsequently fail to deliver on those commitments.

Kwasi Kwarteng, UK’s Energy Minister, said: “The UK is a world leader in clean energy, with over a third of our electricity now coming from renewables. That huge achievement is thanks to the government’s Contracts for Difference scheme.

“The new plans set out today build on the Prime Minister’s Ten Point Plan and put us firmly on the path towards building a new, green industrial revolution”.

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The announcement follows last week’s unveiling of UK Prime Minister’s Ten Point Plan, which outlines an ambitious vision of a low-carbon future for the UK which seeks to ensure that clean energy continues to play a key role in ending human contribution to climate change entirely by 2050.