Up to £557 million of support will be available for future Contracts for Difference auctions with wind projects on the remote islands of Scotland able to apply for the first time, the UK government has confirmed.
Energy minister Richard Harrington revealed yesterday that the funding will be made available for the next clean electricity auctions for less established renewable electricity projects to be held in spring 2019.
The last competitive auction to bring more renewable projects into the market ended in September and brought forward commitments for enough electricity generation to power 3.6 million homes. It secured 3.2GW of electricity from offshore wind projects including the Moray East offshore wind farm which will provide 950MW of capacity, capable of powering over 950,000 homes.
A 2013 report for the UK and Scottish governments concluded that wind projects on the Western Isles, Orkney and Shetland could supply around 3% of the UK’s total electricity demand.
With over 700MW of wind projects with current planning consents on these islands this announcement gives certainty that the UK is an attractive place to invest. This will also benefit the skilled UK supply chain, with many projects expected to spend over 50% of their capital and operating costs within the UK.
Ahead of the launch of the UK government’s Clean Growth Strategy, Mr Harrington said: “The UK government’s Clean Growth Strategy has set out how the whole of the UK can benefit from the global move to a low carbon economy.
“Scotland already has a strong record in exploiting the potential of clean growth, with more than half of Scottish electricity consumption coming from renewable sources.
“We want to go further creating thousands of good jobs and attracting billions of pounds worth of investment. That’s why we are ensuring that remote island wind projects in Scotland, which have the potential to benefit the island communities directly, have access to the same funding opportunities as offshore wind in the next renewables auction round.”
Scottish secretary David Mundell added: “Wind projects on the remote islands of Scotland have the potential to generate substantial amounts of electricity for the whole of the UK and I am delighted they will have the opportunity to compete in the next round of Contracts for Difference. This UK government investment is vital in realising the potential of less established renewable technologies, as well as providing Scottish jobs in the projects supported.
“Clean Growth is at the heart of the Industrial Strategy, and the UK government is determined to unlock opportunities across the UK, while cutting carbon emissions as the world moves to towards a low carbon future.”
Scottish Renewables welcomed the clarity provided by the announcement but said it is “disappointing” that no commitment has been made to allow onshore wind and solar PV to compete for contracts.
Chief executive Claire Mack, said: “Today’s Clean Growth Strategy provides some important commitments from the UK Government which will further our transition to a low-carbon economy.
“The renewed support for offshore wind deployment and innovation, and the commitment to work with the industry on a Sector Deal, is to be welcomed, and will help move the UK towards its goal of reducing carbon emissions while delivering affordable energy and clean growth.
“It is however disappointing that no commitment has yet been made to allow onshore wind and solar PV – the cheapest forms of new power generation – to compete for contracts to sell the clean power they produce.
“With cost reduction recognised as an important part of the continued growth of our low-carbon energy system, it is startling that cheap, popular onshore wind and solar PV are excluded once again from plans for the UK’s energy future. We now look forward to seeing the outcome of the Government’s Cost of Energy Review, where we expect to see these lowest-cost technologies recognised as crucial for the delivery of cheap, clean power for Britain’s homes and businesses.
“Today’s announcement also brings some certainty for less-established technologies, with the commitment of £557 million to be made available for another power contract auction round in Spring 2019. We welcome the announcement that onshore wind projects on Scotland’s remote islands, as well as wave and tidal energy technologies, will be allowed to bid alongside offshore wind and biomass heat and power. It remains imperative, however, that Government use the tools at its disposal to support wave and tidal technologies along the path to full commercialisation and cost reduction.
“We welcome the many positive announcements on heat and transport, and the commitment to work with industry to set out an effective long-term market framework for the heat sector beyond 2020.
“Despite the positive steps detailed in today’s Clean Growth Strategy, the Government still expects to miss the fifth carbon budget unless it purchases international carbon credits.
“While the announcements made in the Strategy on cutting carbon in the heat and transport sectors in particular are welcome, the Government will need to go further still if it is to meet its legal requirements on climate change and its global commitments under the Paris Agreement.”