RenewableUK has said that the £205 million budget for the latest Contract for Difference (CfD) auction – announced by the UK Government yesterday (16 March) – is “sending the wrong investment signals” to renewable energy investors.
The fifth CfD funding round includes £170 million towards established technologies, such as offshore wind, and a ring-fenced budget of £10 million available for tidal stream projects.
RenewableUK’s economics and markets manager Michael Chesser worried that this budget fails to unlock the potential of renewables.
“Unfortunately, in the light of global inflationary pressures, the budget and parameters set for this year’s CfD auction are currently too low and too tight to unlock all the potential investment in wind, solar and tidal stream projects which the industry could deliver,” said Chesser.
“Concerns about energy bills and energy security are at a record high, so the UK should be trying to maximise investment in low-cost clean energy, to provide relief for billpayers who’ve been hit hard by massive spikes in global gas prices over the past year.”
CfDs has significantly bolstered the UK’s renewable portfolio, allowing consumers to benefit from cheap, clean energy.
Since their introduction, CfDs have endorsed renewable projects with a combined capacity of almost 27GW.
The most recent round (AR4) – the largest CfD auction to date and the first in which solar and onshore wind could participate since 2015 – secured almost 11GW of low-carbon capacity.
This promising progress cannot cause the UK Government to become complacent in its support for renewable projects however, especially with increasingly attractive international policies and support schemes.
“At a time when the US and EU are bending over backwards to offer incentives for renewable energy developers to come to them to build new projects, the UK is sending the wrong investment signals. As a result, we risk losing vital opportunities to scale up our supply chains around the UK, denying communities the industrial-scale benefits which our sector offers. We’re also jeopardising our global lead in cutting-edge clean energy technologies like floating wind and tidal stream,” continued Chesser.
“We’re calling for the Government to revise the CfD budget so that we can stay on track to deliver on our renewable energy targets, as well as creating tens of thousands of high-quality green tech jobs and attracting billions in private investment in the years ahead.”