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September 13, 2021

UK BEIS announces funding for renewable projects in CfD scheme

BEIS will make allocations through three pots, with offshore wind projects receiving a budget of $276m.

By Umesh Ellichipuram

The UK Government’s Department for Business, Energy and Industrial Strategy (BEIS) has announced funding for renewable energy projects in the fourth round of the Contracts for Difference (CfD) scheme.

A total of £265m ($366m) will be made available a year for the projects as part of the round.

Due to be held this December, the scheme allocates 15-year CfDs through three pots, with the offshore wind projects receiving a pot budget of £200m ($276m).

A £50m ($69m) pot budget will be allocated for emerging renewable technologies, with £24m ($33m) of this to be made available for floating offshore projects.

The government has also announced it will allocate £10m ($13.8m) for established wind and solar technologies, which was not included in the previous scheme.

The UK’s budget figures are understood to be based on 2011-12 prices.

In addition, the government announced that it will publish a draft allocation framework for the fourth CfD round, as well as a strike price methodology note.

The initiative aims to install 5GW of capacity and will limit the capacity of onshore and solar photovoltaic projects to 3.5GW.

Scottish Renewables chief executive Claire Mack said: “This auction comes at a crucial time for the UK’s climate leadership and I’m very pleased to see that greater renewable capacity will be unlocked by what is being set out today, particularly recognising Scotland’s offshore expertise and ambition.

“While we are pleased that a balanced range of technologies will be supported, we are concerned that as little as 1.5GW of onshore wind could be secured, which would fall far short of what is needed to meet net-zero goals.

“We were also hoping that more ringfenced support would be offered to our impressive tidal sector, which stands ready to demonstrate its’ growth potential by deploying at the next level of commercial scale.”

Through the CfD scheme’s fourth round, the UK government aims to double the country’s renewable capacity.

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