The government has revealed details of the fourth round of the Contracts for Difference (CfD) scheme, including its £265 million budget.
The bulk of the subsidies available – £200 million – will go towards offshore wind, which will compete in its own pot with no maximum capacity.
Established technologies, such as onshore wind, solar and hydropower, which have been unable to bid since 2015, have been allocated a £10 million budget for their pot, with a cap of 5GW on total capacity. This segment will include maximum capacity limits of 3.5GW on both onshore wind and solar PV.
The third pot, for emerging technologies, with floating offshore wind, tidal stream, geothermal and wave explicitly mentioned, has been earmarked £55 million with no capacity cap. Of this, £24 million is ringfenced for floating offshore projects, which the government said showed commitment to the development of “this high-potential, innovative technology”.
The next round of the CfD scheme, opening in December, will aim to double the renewable electricity capacity secured in the third round and generate more than the previous three rounds combined. The government pointed out that the proposed offshore wind capacity alone will provide enough power for around 8 million homes.
Energy minister Anne-Marie Trevelyan said: “The Contracts for Difference scheme has helped the UK become a world leader in clean electricity generation and lowered prices for consumers.
“The new plans set out today deliver on the Prime Minister’s Ten Point Plan and will support the next generation of renewable electricity projects needed to power our homes and meet our world-leading climate change targets.”
The announcements today (13 September) set out the government’s ambitions for the scheme with final levels of support to be finalised ahead of the round opening in December.
Documents set to be published later this morning include a draft allocation framework, setting out the rules for the fourth CfD round, and the eligibility requirements. There will also be an administrative strike price methodology note, setting out the how the maximum backstop prices available to individual renewable technologies will be set.
Updated guidance is also being published for onshore wind projects in England, to “ensure local communities are given a more effective voice on local development”.