The fourth phase of the UK governments Contracts for Difference (CfD) scheme is perhaps the most successful so far, procuring around 11 GW across a variety of clean technologies. The largest capacity of over 7 GW has been acquired from new offshore wind projects off the coast of Great Britain. It plans to raise the country’s overall capacity installed and under construction by 35 percent helping in achieving the government’s 50 GW offshore wind target by 2030.
For the first time, new technologies such as tidal streams and floating offshore wind projects were successful in the fourth round. Tidal stream capacity was 41 MW, while floating offshore wind capacity was 32 MW. Around 93 projects with the current planning authority in England, Scotland, and Wales were awarded contracts through the competitive auction procedure, which is more than in the previous three rounds combined.
Floating offshore wind and tidal stream energy would contribute to British energy security and independence by producing cleaner, affordable, and diversified energy in the UK. CfDs provide project developers with security when investing in new renewable energy infrastructure by guarding them against variable wholesale pricing. When wholesale power prices are high, generators pay the money back into the network, lowering the net costs of the plan to customers.
REGlobal’s Views: This large auction with 11 GW of awarded capacity will help the UK to significantly reduce its energy imports and improve its energy security. The country is dealing with high energy bills owing to volatile gas prices and such auctions will make UK’s citizens immune to global energy fluctuations.