Labour backs annual CfD auctions

Labour has called for annual Contracts for Difference (CfD) offshore wind auctions as part of its green recovery plan.

A new report, prepared by the party’s National Policy Forum, outlines the opposition’s “Build it in Britain” economic stimulus programme, which proposes at least £30 billion of investment in low-carbon sectors in the next 18 months.

It says regulatory barriers are holding back investment in offshore wind meaning that shovel-ready projects currently lack investment due to “arbitrary or inappropriate restrictions”.

The report says: “The government must move to annual CfD auctions, in order to speed up and smooth out the delivery of projects. It should also begin to lift some of the capacity restrictions that have been imposed on existing CfDs.”

It adds that there is a “yawning gap” between the government’s target to increase offshore wind to 40GW by 2030 and likely delivery.

The £160 million of funding recently announced by the government to upgrade ports and turbine manufacture factories “falls far short” of the investment required, which Labour estimates at £50 billion of public and private investment throughout the 2020s.

The existing Offshore Wind Sector Deal should include steps to “substantially upgrade” ports and shipyards for offshore wind supply chains, Labour says.

On hydrogen, the report accuses the UK of “slipping behind” other countries, such as Germany, which has recently committed £8.1 billion to the sector.

“Over the last 10 years, the UK has often been slow to grasp new green opportunities. Given the significant potential and natural advantage the UK could have in this area, a credible, jobs-rich green recovery must include a workable and ambitious hydrogen strategy.”

The report backs a new CfD auction for green hydrogen and funding for approximately 214,000 public electric vehicle chargers, which it estimates are needed for the electrification of the transport fleet.

It says both the £2 billion Green Homes Grant (GHG) and the Public Sector Decarbonisation Fund, which is designed to support the retrofit of buildings like schools and hospitals, should be extended for at least for the next 18 months. The GHG, which offers home-owners and landlords grants for energy efficiency and low carbon heating measures, is due to expire at the end of next March.

These measures to support decarbonisation of homes and other buildings could support 100,000 job, it estimates.

It says “Despite the Conservative government promise to be the ‘greenest government ever’, it has failed to back that rhetoric with meaningful action. Far from worldleading, the green recovery measures that the government has committed to so far have paled in comparison with those announced by other major economies. The government’s lack of ambition is not only disastrous for tackling the long-term climate emergency, but also does not meet the scale of the current jobs and unemployment crisis.”

Ed Miliband, shadow secretary of state for business and environment, said: “In recent years, and particularly during this crisis, our country has fallen behind in the drive to a cleaner, greener economy.  We’ve seen far more rhetoric than action – and that has cost our country jobs.”

The publication of Labour’s green recovery plan follows yesterday’s announcement by the government’s that the UK will issue its first Green Sovereign Bond next year.

The bond, which will kickstart a series of further issuances, is designed to help finance projects to tackle climate change and infrastructure investment.