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U.K. to invest in renewable energy

The new U.K. government has pledged £730 million ($906 million) to renewable energy projects in an effort to calm fears that its planned exit from the European Union (EU) will sabotage its reputation as a leading destination for renewables investment.

Contracts for Difference

Business and Energy Secretary Greg Clark announced that the funding will be made available over the life of the government, starting with the second round of Contracts for Difference (CfD) funding, amounting to £290 million ($360 million) for renewable energy projects. Clark said that the funding will be awarded in April 2017 to projects that will produce enough renewable electricity to power around 1 million homes and reduce carbon emissions by roughly 2.5 million tonnes per year from 2021-22 onwards.

In the first CfD funding round, eight large-scale renewable energy projects with a combined generating capacity of 4,500 megawatts (MW) were awarded contracts. Ranging from windfarms to biomass, the projects were expected to attract up to $20 billion in private sector investment and support up to 8,500 jobs. For additional information, see June 12, 2014, article – U.K. Pricing Deal for 4,500 MW of Green Power.

“We’re sending a clear signal that Britain is one of the best places in the world to invest in clean, flexible energy as we continue to upgrade our energy infrastructure,” Clark explained. “This is a key part of our upcoming Industrial Strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”

CfD second round of funding

This next round of CfD funding will focus on what the government termed “less established technologies,” including offshore wind, advanced conversion technologies, anaerobic digestion, dedicated biomass with combined heat and power, and wave, tidal stream and geothermal projects. The winning projects will have to be ready for commissioning between 2021 and 2023.

The government said the competitive auction system will result in “cheap renewable energy for investors.” It highlighted that the maximum price for offshore wind projects is now 25% lower than was set for the last auction and that by the time April’s auction concludes, it “could further reduce that cost.”

Alongside the funding the government confirmed its commitment to phase out unabated coal-fired power generation by 2025. It said that taking unabated coal power “out of our energy mix and replacing it with cleaner technology, such as gas, will significantly reduce emissions from the U.K.’s energy use.” The government first announced its intention to quit coal-fired power last November. For additional information, see November 23, 2015, article – U.K. Calls Time on Coal-Fired Power.

Coal-fired plants closing

Coal-fired plants have been closing in the U.K. at an increased rate in recent years. In March, Scotland’s last coal-fired plant, Longannet, was shut down after 46 years of service. The 2,400-MW plant was operated by ScottishPower Ltd. (Glasgow, Scotland), part of Spanish energy major Iberdrola S.A. (BMAD:IBE) (Bilbao, Spain), and supplied enough power for 2.3 million homes annually.

Source: Industrial Info Resources