Britain has announced plans to expand its flagship renewable energy support scheme, the Contracts for Difference (CfD), in an effort to encourage investment in the sector. The government has opened a consultation on the proposed changes, which could see applicants rewarded for “non-price” factors such as supply chain sustainability, addressing skills gaps and innovation.
The CfD scheme is designed to support new low-carbon electricity generation projects, including offshore wind and solar projects. Under the scheme, generators are guaranteed a fixed, pre-agreed price for the electricity they provide over the term of the contract, enabling them to sell their low-carbon energy into the market. The scheme has so far supported 26.1 gigawatts (GW) of low-carbon projects, but the government says changes are needed “in face of the deployment challenges currently faced by the renewable energy industry”.
The proposed reforms could help to drive investment in the sector, expand the economy and boost Britain's energy security, according to the Department for Business, Energy and Industrial Strategy. “Factors such as inflation, commodity price increases, and pressure from international competition mean that the UK will have to continue working hard to pull in the investment required to reach our Net Zero and energy security goals,” said Adam Berman, Deputy Director for Advocacy at Energy UK, an energy industry trade association.
The UK government has set targets for significant increases in wind power generation as part of its goal to reach net zero emissions by 2050 and become more independent of imported energy. Last month, the government announced plans to boost energy security and tackle emissions, but critics argued that a lack of new investment and incentives meant it failed to provide any new boost for the country's green energy sector. The proposed changes to the CfD scheme could help to address this shortfall and encourage more investment in renewable energy.
