The UK Infuses £265 Million to Support Renewable Energy Projects

The U.K. Government will infuse £265 million (~$366 million) to support renewable energy projects in the upcoming Contracts for Difference (CfD) auction. CfDs are 15-year private contracts between renewable energy generators and the government-owned – Low Carbon Contracts Company (LCCC) that manages CfDs.

The CfD program incentivizes investment in renewable energy by providing project developers with high upfront costs and long lifetimes with protection from volatile wholesale prices.

For the first time since the launch of CfDs in 2015, established technologies, including onshore wind and solar, will also participate in the bidding process. The previous round of the CfD program delivered record-low prices and secured enough clean energy to power over seven million homes.

The CfD program has also reduced the price of offshore wind by around 65%. The UK aims to double its renewable electricity capacity secured in the third round and generate more than the previous three rounds combined. In all, £265 million(~$366 million) will be provided to businesses in the program’s fourth round.


The additional offshore wind capacity resulting from the funding alone could power around 8 million homes.

Renewable energy developers will bid for a share in a £265 million(~$366 million) subsidy pot. Pot 1 includes established technologies such as onshore wind, solar photovoltaic (PV), and hydropower, and £10 million (~$ 13.83 million) will be provided for these projects. A cap of 5 GW is imposed on the total capacity, with maximum capacity limits of 3.5 GW on both onshore wind and solar PV.

Pot 2 includes less established technologies like floating offshore wind, tidal stream, geothermal, and wave, and £55 million (~$76.06 million) will be made available for these technologies. Meanwhile, £24 million (~$33.19 million) of the total  £55 million (~$76.06 million) will be earmarked for floating offshore wind projects.

Under pot 3 covering offshore wind, £200 million (~$276 million) will be provided.

The funding is expected to help UK achieve its target of 40 GW of capacity by 2030. The budget figures are based on 2011-2012 prices.

The CfD program has boosted the success of the UK’s world-leading offshore wind industry. As per the Prime Minister’s Ten Point Plan for a Green Industrial Revolution, the offshore wind sector could support up to 60,000 jobs by 2030.

“The CfD program has helped the UK become a world leader in clean electricity generation and lowered prices for consumers,” said Anne-Marie Trevelyan, UK Energy Minister.” The new plans set out today deliver on the Prime Minister’s ‘Ten Point Plan’ and support the next generation of renewable electricity projects needed to power our homes and meet our world-leading climate change targets.”

Recently, UK had announced that it will invest $1.2 billion through public and private investments in green projects and renewable energy in India to support the latter’s target of 450 GW of renewable energy by 2030.