In the largest ever round of its Contracts for Difference renewable energy scheme, the UK government has pledged to provide businesses with £265 million per year to ramp up renewable electricity capacity.
The spending forms part of the Contracts for Difference [CfD] scheme, which the government uses to encourage investment into low-carbon electricity. The initiative is open to projects operating in Great Britain.
The initiative encourages investment into renewables by providing developers of projects with high upfront costs and long lifetimes with protection from volatile wholesale prices, ensuring consumers are not left paying higher bills when electricity prices go up.
The £265 million per year investment will be introduced in the fourth round of the scheme, which seeks to double the renewable electricity capacity from the third round and generate more than the first three rounds combined.
The Department for Business, Energy and Industrial Strategy [BEIS] says that the additional offshore wind capacity generated by the funding could power as many as eight million homes.
Within the spending pledges for the fourth round of the CfD scheme, £200 million will go toward offshore wind to help ensure the UK meets the Conservatives’ manifesto commitment of 40GW of capacity by the year 2030. Meanwhile, £55 million will be invested into supporting emerging renewable technologies, £24 million of which is ringfenced for floating offshore projects.
The government is known to have high hopes for the potential of the UK’s leading offshore wind industry, with the prime minister having previously said in his plan for a Green Industrial Revolution that the sector could generate up to 60,000 jobs by 2030.
Anne-Marie Trevelyan, former energy minister and incumbent international trade secretary, said: “The Contracts for Difference scheme has helped the UK become a world leader in clean electricity generation and lowered prices for consumers.
“The new plans set out deliver on the prime minister’s Ten Point Plan [for a Green Industrial Revolution] and will support the next generation of renewable electricity projects needed to power our homes and meet our world-leading climate change targets.”
The contracts allocated through CfD are distributed through a thorough and competitive auction process, where the cheapest projects in each technology group are handed contracts first.
The fourth round of the CfD scheme opens in December, and the promises of new investment into greener energies will be music to the ears of one director and his business.
John Skipper, director of HV/MV switchgear product and systems developers SPE Energy, is a business leader who is passionate about investment into the research and development of greener energy products. Indeed, his own business and its venture partners spent £3 million on R&D between 2015 and 2018 to develop high-quality new and green products for the sector.
The switchgear products that SPE Energy develop tend to be found in purpose-built substations and are defined as “the aggregate of switching facilities for power stations and/or points of electrical distribution”. This renders them critical components in ensuring that the government’s future green energy is transported around the national grid in an equally green way.
Skipper told The Parliamentary Review: “With our R&D funds, we developed high-quality new products. This includes our ‘Orion’ integrally earthed switchgear panel, incorporating a vertically isolated horizontally withdrawable vacuum circuit breaker. Not only is Orion a clean, environmentally friendly product, but it’s also arc-proof to deliver enhanced operator safety.
“Orion is symptomatic of our focus as a business, which is to provide products that are innovative, cost-effective, reliable, safe and green.”