Osborne: £730m for CfD auctions
UPDATE: Budget unveils support for 4GW of renewables
The UK government will auction Contracts for Difference of up to £730m this Parliament for up to 4GW of offshore wind and “less established” renewables generating electricity in 2021 to 2026.
Up to £290m will be available for the first auction expected this year.
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Support for offshore wind will be capped initially at £105/MWh (2011-12 prices), falling to £85/MWh for projects commissioned by 2026.
Last November, Energy Secretary Amber Rudd outlined plans to support up to 10GW of new offshore wind capacity from three CfD auctions during this Parliament.
The first auction is focused on “less established” technologies – offshore wind and remote island onshore wind, with no indication of future support for onshore wind.
RenewableUK deputy chief executive Maf Smith said the Budget is "tight" but the industry would welcome the challenge of reducing costs to the levels set out by the Treasury.
“This budget shows that offshore wind will be cheaper than new nuclear power and competing with gas by 2025, making it even better value for money," he said.
"Today’s announcement will increase confidence, attracting billions of pounds of investment in the UK’s supply chain and a long-term commitment which will keep the UK as the number one destination in the world for investors in this technology.”
The government did not set out details about the Levy Control Framework beyond 2021/22 but said it would "continue to control costs on consumer bills", with further details to be announced in the autumn.
The Treasury said the long-term direction of the carbon floor price would be set out in the Autumn Statement and would be capped at £18 per tonne of carbon dioxide to 2019/20 and the same level plus inflation in 2020/21.
The UK will allocate £50m for innovation in energy storage and demand-side response over the next five years. Ofgem will consult later this year on the future of the £100m Network Innovation Competition to “maximise the delivery of genuinely innovative projects and technologies”.
Chancellor George Osborne also confirmed plans to abolish the Carbon Reduction Commitment Energy Efficiency Scheme and raise the Climate Change Levy from 2019.
Image: George Osborne (HM Treasury)