The UK government says new reforms to renewables scheme could drive further investment and improve energy security.
The Contracts for Difference (CfD) scheme is the government’s mechanism for supporting new British low-carbon electricity generation projects, such as offshore wind and solar developers.
Government says potential reforms could mean applicants would be rewarded for including wider benefits their projects could bring when submitting price bids to government.
Currently, CfDs are awarded based on the bid price submitted by renewable energy generating stations, such as an offshore wind farms. The government says the aim of the scheme is to increase deployment and ensure good value to electricity consumers and, over time, drive down costs.
However, the government is now seeking evidence and views about reviewing applications not just on their ability to deliver low-cost renewable energy deployment, but also based on how much a renewable energy project contributes to the “wider health” of the renewable energy industry.
This potential reform to the scheme to introduce non-price factors presents a solution to grow the renewable energy supply chain.
The government says the reforms could see applicants considering overall costs alongside other “non-price factors”, such as supply chain sustainability, when submitting their bids.
Minister of State for Energy Security and Net Zero Graham Stuart, commented: “Our flagship CfD scheme has been hugely successful in supporting British low-carbon electricity generation, while also driving down costs for the benefit of consumers.
“But we want to go further to ensure we maximise the scheme’s potential to improve energy security and ensure renewable energy developers can make the necessary investment in supply chains and innovation, which will ultimately make for a stronger sector and help our economy to grow.
“This potential reform to the scheme to introduce non-price factors presents a solution to grow the renewable energy supply chain as we accelerate our energy transition plans to power more of Britain from Britain.”