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UK government confirms up to £557 million for new renewable energy projects

The UK government has confirmed up to GBP 557 million (≈ EUR 626.23 million) for the next clean electricity auctions for "less established renewables" ahead of the launch of the Clean Growth Strategy.

An aerial view of Europe’s largest biomass power project, Drax Power station in the UK with four pellet storage domes (photo courtesy Drax).

An aerial view of Europe’s largest biomass power project, Drax Power station in the UK with four pellet storage domes. In 2016 the European Commission (EC) opened an in-depth investigation, which included feedback from “interested third parties”, to ensure that the proposed CfD for Drax would not lead to overcompensation and undue biomass market distortions. The EC found that the increased demand for wood pellets could be “fulfilled by the market without undue negative side-effects” and that the project’s contribution to increasing the share of renewable energy produced in the UK “outweighs any potential distortions of competition that could be triggered” by the government support (photo courtesy Drax).

Energy Minister Richard Harrington confirmed October 11 that up to GBP 557 million (≈ EUR 626.23 million) will be made available for less established renewable electricity projects as part of the government’s Clean Growth Strategy, to drive economic growth and clean up the energy system.

Since 1990 the UK’s emissions are down by more than a third while the economy has grown by two-thirds. Low carbon generation provided more than half (52%) of the country’s electricity this summer, according to National Grid, while PwC analysis shows the UK decarbonising faster than any other G20 nation.

The Clean Growth Strategy, which will be published this week, will build on this success and ensure Britain remains a global leader in the move towards a low carbon economy. It will ensure the whole country can benefit from new technologies, jobs and businesses that are good for consumers, the environment and the economy.

As part of the strategy, developers will compete for up to GBP 557 million (≈ EUR 626.23 million) of funding in Contracts for Difference (CfD) auctions which drive down energy costs for consumers and increase business confidence. The latest auction saw the cost of new offshore wind drop by 50 percent compared to the first auction held in 2015 and resulted in over 3 GW of new capacity.

The government’s Clean Growth Strategy will set out how the whole of the UK can benefit from the global move to a low carbon economy. We’ve shown beyond doubt that renewable energy projects are an effective way to cut our emissions, while creating thousands of good jobs and attracting billions of pounds worth of investment, said Energy Minister Richard Harrington.

The Clean Growth Strategy will look across the whole of the economy and the country. It includes ambitious proposals on housing, business, transport and the environment, as well as the power sector. It will also show how actions taken to tackle emissions have helped to reduce energy bills for households.

The next CfD auction is planned for spring 2019.

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