Offshore wind to compete in separate CfD pot

The government has confirmed key details of the fourth Contracts for Difference (CfD) auction, to open in late 2021.

The auction’s capacity will increase from 5.8GW in 2019 to 12GW, with offshore wind moved to its own pot, as opposed to competing against other technologies.

Floating offshore wind projects will be able to bid for contracts for the first time in the fourth round. As previously announced, onshore wind and solar will be included for the first time since 2015. The government has also committed to update guidance for new onshore wind schemes in England to “fully reflect the impacts and benefits to local communities”.

Alongside the new CfD details, a consultation has been launched on a Supply Chain Plan, aimed at identifying “increasing the competitiveness of UK manufacturers”.

The government said its proposals were designed to “increase the clarity, ambition and measurability of commitments made by renewable project developers when they bid for contracts in the CfD scheme, and to introduce new measures if they subsequently fail to deliver on those commitments”.

Energy Minister Kwasi Kwarteng said: “The UK is a world leader in clean energy, with over a third of our electricity now coming from renewables. That huge achievement is thanks to the government’s CfD scheme.

“The new plans set out today build on the prime minister’s 10-point plan and put us firmly on the path towards building a new, green industrial revolution.”

Responding to the announcement, Energy UK’s chief executive Emma Pinchbeck said: “We have long called for the next CfD auction round to bring forward as much low carbon power as possible – so we strongly welcome the potential for double the capacity to bid in next year.

“Past auctions have been extremely successful, with renewables now an extremely cheap and mainstream form of power. The return of solar and onshore wind, and the inclusion of new and necessary technologies like floating wind and storage is good news for bill payers and for British industry alike.”

RenewableUK’s chief executive Hugh McNeal said:  “Next year’s renewable power auctions can unlock over £20 billion of new investment in the economy and secure an unprecedented amount of low cost, clean electricity for consumers using the full range of renewable technologies we have available. As one of our lowest cost, large scale power options, onshore wind has a vital role to play in meeting the challenge of net zero and the re-opening of CfD auctions is an important step to ramp up investment in this key technology.

“The new structure for clean power auctions, with a dedicated pot for offshore wind, can deliver the scale needed for our 40 gigawatt 2030 target as well as providing support for innovative marine and floating wind technologies. The industry is investing to develop a vibrant, competitive UK supply chain. We look forward to working with government on the details of how reforms to Supply Chain Plans can support this.”