The UK government is creating a pathway for more offshore wind projects as it launched a consultation on proposed reforms to the upcoming Allocation Round 7 (AR7) Contracts for Difference (CfD) auction.
The CfD scheme is the government’s main mechanism for supporting low-carbon electricity generation, incentivising investment in renewable energy by protecting developers from volatile wholesale prices.
The government is consulting on proposals to provide greater certainty to investors by:
- relaxing the eligibility criteria on planning consentfor fixed-bottom offshore wind, helping to speed up new offshore wind farms coming
- changing how offshore wind budgets are set and published, enabling funding to be invested more efficiently
- increasing the Contracts for Difference contract termbeyond the current 15 years, making renewables contracts more cost effective
The UK is already home to the three largest operational offshore wind farm projects in the world, has 30.7 GW of offshore wind either installed or committed, a further 7.2 GW of capacity consented, against a target capacity range of 43 to 50 GW by 2030. However, the government said that the UK must secure even more to deliver clean power by 2030.
According to the government, the CfD reforms will enable the UK to go further and faster to secure its position as a clean energy superpower.
Energy Secretary Ed Miliband said: ”Last year, we celebrated delivering the most successful auction round in history – now we want to go even further.
Our bold new reforms will give developers the certainty they need to build clean energy in the UK, supporting our mission to become a clean energy superpower and bring down bills for good.”
Neil McDermott, Chief Executive Officer of Low Carbon Contracts Company, said: “The CfD scheme has been instrumental in delivering low-carbon electricity to date. As we move towards the government’s 2030 Clean Power target, the CfD will play an even more significant role, maintaining GB’s position as a global leader in renewable energy.
The proposed changes outlined in the consultation published today include…enabling floating offshore wind to scale up through phased CfDs and increasing the CfD contract term beyond the current 15 years.”
The consultation on reforms to the Contracts for Difference scheme is open for 4 weeks until 21 March, with a government response expected ahead of the AR7 round.