GovWire

A multi-million-pound boost for cleaner, more secure energy will make Britain the first choice for investors, Grant Shapps said today.

The Energy Security Secretary today announced a 22 million increase in government backing for renewables through the flagship Contracts for Difference scheme taking the total budget to 227 million for this auction.

The scheme launched in 2014 is the governments main system for supporting low-carbon electricity generation and has already led to an increase in the proportion of the UKs energy coming from renewables.

In 2022, renewables fuelled around 42% of the UKs electricity generation up from 7% in 2010 - compared to around 21% in the US and 23% in Japan.

In the first quarter of 2023, renewables generated a record 48% of our electricity, all making strong progress towards our targets to deliver a decarbonised power sector by 2035 and net zero by 2050.

The increased funding combined with the introduction of annual auctions this year, will boost investments in Britains world-leading renewable industry, while strengthening the UKs energy security, fostering growth in the countrys green industries and reducing exposure to volatile global gas prices.

Energy Security Secretary Grant Shapps said:

Putins barbaric action against Ukraine made clear our need to do whatever it takes to bolster our energy security.

Todays funding through our flagship Contracts for Difference scheme the lifeblood of our renewables industry for nearly a decade will help grow our economy by making Britain the first choice for investors in renewable energy projects and secure skilled jobs for future generations.

This will be the case for established technologies like solar, and new innovations like floating offshore wind and, alongside our backing for oil and gas, carbon capture and our revival in nuclear, will ensure we can help power more of Britain from Britain for decades to come.

Todays new funding for the current round (AR5) will mean:

• an increased budget for established technologies such as solar and offshore wind from 170 million to 190 million
• an increase in the budget for emerging technologies such as floating offshore wind up from 35 million to 37 million
• maintaining 10 million ring-fenced budget for tidal stream projects

This funding boost is expected to send a powerful signal to the industry, increasing developer confidence in the sector every year and enhancing the UKs reputation as among the most attractive places to invest and grow the economy, with nearly 25,000 jobs directly supported by renewable electricity sectors in 2021.

Todays increase comes as Deputy Prime Minister Oliver Dowden visits Able Seaton Port to announce the installation of the first of over 2 hundred 260m tall wind turbines is installed at Dogger Bank - becoming the worlds largest offshore windfarm. A specialised floating platform, taller than the Eiffel Tower, has been created to install the wind turbines onto the seabed.

When complete, the 277 turbines, which include British steel manufactured in Wales and processed in Corby and Hartlepool, will be capable of powering the equivalent of up to 6 million homes annually. Dogger Bank is being built in 3 phases Dogger Bank A, B and C by renewables developers SSE Renewables, Equinor and Vargronn.

This comes as the register revealing the most serious risks to the United Kingdom, the National Risk Register, is published today as part of government plans to better prepare the public and businesses for the threats facing the country, including to energy security.

Deputy Prime Minister Oliver Dowden said:

Today weve published the latest National Risk Register, showing the many challenges we face to keep Britain safe in an uncertain world - like the risk ofdisruption to global energy supplies.

Backing British renewables will tackle that risk and undermine Putins energy ransom. Which is why Im with SSE in Hartlepool today as we install the first wind turbine at the new Dogger Bank offshorewind farm, generating cheap, clean energy to power millions of British homes.

This latest financial backing will help to replace expensive imported fossil fuels with cheaper, cleaner, domestic sources of energy. Building a more secure energy future with thriving green industries will have the knock-on effect of helping to grow the UKs economy and create jobs across the country, with billions of pounds in private investment.

The Contracts for Difference scheme has already helped accelerate plans to diversify, decarbonise and domesticate the UKs energy supplies, with the last round (AR4) securing around 11GW of low carbon capacity enough to generate sufficient electricity to power 12 million British homes through nearly 100 clean technology projects.

The scheme supports the deployment of renewable power right across Britain, with the scheme so far having awarded contracts to 52 projects in Scotland, which represents around 30% of all CfD projects.?In Wales, the scheme has so far awarded contracts to 9 projects, totalling around 260MW of capacity.

Minister of State for Energy Security and Net Zero Graham Stuart said:

Our successful, world-leading scheme has accelerated the roll-out of renewable, homegrown energy.

Todays increase will improve energy security and maximise the potential of the scheme. This will result in investment, a stronger renewables sector and growth to our economy.

Neil McDermott, CEO of the Low Carbon Contracts Company (LCCC), said:

The 22 million boost to the Contracts for Difference (CfD) Allocation Round 5 reaffirms the governments commitment towards transforming Britain into a global leader in renewable energy. Contracts for Difference plays a crucial role in enhancing energy security, driving economic prosperity and propelling us towards a more sustainable future. LCCC currently manages a portfolio of 98 CfDs, and is excited to deliver AR5, furthering our vision to accelerate the delivery of net zero.

Claire Dykta, Head of Markets for the National Grid Electricity System Operator, said:

Following our evaluation of qualifying projects we welcome the Secretary of States decision to revise the budget for Allocation Round 5.

Notes to editors

The budget estimates for this round of Contracts for Difference are presented in 2011-2012 prices in line with the Control for Low Carbon Levies. These figures are an estimate of the maximum amount of annual support, within the first 4-5 years following deployment.

Actual payments will vary depending on future wholesale electricity prices, and outcomes of the competitive auction process.This includes the volume of successful capacity, the range of technologies supported, as well as the strike price paid per MWh generated, as set through the auction. This means in some scenarios the total sum of support payments could be in the billions. As set out in Powering Up Britain, levy funded support for renewables, including through the Contracts for Difference scheme, has totalled around

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