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REA urges government to remove policy blockages as it doubles down on six monthly CfD call

The CfD now runs annually following changes to its frequency earlier this year. Image: Getty

The CfD now runs annually following changes to its frequency earlier this year. Image: Getty

Improving grid connections and boosting investor confidence should be key priorities for the government, the Association for Renewable Energy and Clean Technology (REA) has said.

The trade association has urged the government to remove policy blockages in the upcoming Energy Security Strategy, stating that the sector is prepared for a mass rollout of small, medium and large-scale projects to accelerate renewable deployment if the government is "proactive in removing barriers".

Indeed, a recent survey by the REA found that nine in ten businesses indicated they would be able to significantly increase the number of projects they could deploy in the next two years if the regulatory or policy environment was improved.

Across all responses, the pipeline for deploying renewable energy and clean technology projects was shown to more than double, while the number of jobs increases by around two-thirds.

The REA provided a number of suggestions to catalyse this, including introducing an additional emergency Contracts for Difference (CfD) auction in the next six months, followed by regular six monthly CfD auctions with a clear rolling timetable and sufficient budget. There should also be a simplified CfD contract to support smaller projects.

In February, it was announced that CfD auctions are to be held annually - up from the previous frequency of every two years. This followed RenewableUK calling for annual auctions in 2021, while the same year the REA called for six monthly auctions.

Other suggestions from the REA today include addressing transmission and distribution grid capacity constraints to allow renewables to connect faster, moving faster to establish a hydrogen production route to market and removing restrictions from the Green Gas Support Scheme.

Lastly, initiating an industrial fuel switching tariff to enable organisations to switch away from relying on fossil gas could also act as a catalyst, the REA said.

Dr Nina Skorupska CBE, chief executive of the REA, said: "The government must be bold with their Energy Security Strategy. This is a crucial moment – over the coming months the UK must rapidly move away from fossil fuels onto renewables otherwise we could continue to suffer from volatile energy prices."

This strategy was first announced by prime minister Boris Johnson earlier this year, with this expected to include measures to help manage the increased volatility in energy prices.

The government has previously stressed the need for a “strong, home-grown renewable energy sector” to reduce reliance on global gas prices, with changes such as the increased frequency of CfD auctions designed to support this.

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