The Low Carbon Contracts Company (LCCC) has signed 130 contracts for difference (CfDs) following the most recent allocation round (AR6).
The sixth round is the largest-budgeted CfD round that, once all awarded projects are operational, will see 9.58GW of renewable generation come online. According to LCCC, this will bring the total CfD-awarded capacity to 34.74GW.
The LCCC is a private company that manages the CfD process, issuing and managing the contracts and making payments under the scheme. It is owned by the secretary of state for energy security and net zero and was initially established to help in the delivery of Electricity Market Reform (EMR).
Neil McDermott, LCCC CEO commented: “The success of AR6 not only advances our commitment to decarbonisation but also accelerates our journey towards a net zero future. We are eager to partner with our new and existing generators to ensure timely delivery.”
AR6 had a budget of £1.5 billion after the Labour government announced a £500 million increase on 30 July. After what energy secretary Ed Miliband called a “disastrous” fifth auction round (AR5) in September 2023, when no offshore wind was awarded, this year saw a total £1.1 billion available for offshore wind developments.
Pegged as the government’s most successful renewables auction to date, AR6 awarded a record 131 clean energy projects with a combined total capacity of 9.58GW, almost three times the awarded capacity in the previous auction round (3.7GW). Just one company did not ultimately sign its contract.
Commenting on the signing, energy minister Michael Shanks said: “We acted decisively to increase the budget for AR6, delivering the most successful renewables auction to date.
“Securing more clean energy projects is how we protect billpayers from volatile fossil fuel markets, strengthen energy security and deliver our mission to make Britian a clean energy superpower by 2030.
“The signing of these contracts marks another key milestone on our journey, and we look forward to continue working with industry to speed up the rollout of clean, cheap and secure power across the country.”
The East Anglia II offshore wind farm, set to be located 33km off the coast of Suffolk, was one of the projects successful in AR6. Once complete, the £4 billion project will have a maximum output of 960MW.
Ross Ovens, ScottishPower’s managing director for offshore development and operations, said: “It’s fantastic to reach this milestone for so much renewable generation, and especially pleasing to see offshore wind leading the charge towards a cleaner and greener future.”
