Under the ‘Energy for Growth’ scheme, the Government Procurement Service (GPS) will strike deals directly with renewable projects to buy set proportion of their capacity for up to 25 years.
Those projects are expected to be able to use the guaranteed business to attract further investment. It is hoped the scheme will help 150 stalled projects gain the additional funding required to continue their development.
The GPS is the UK’s largest electricity and gas user, representing 3 per cent of national demand. Under the pilot it will spend 2 per cent of that, worth £25 million, on deals with non-intermittent power generators such as biomass and energy from waste.
If successful, over the next five years the GPS will diversify half of its energy portfolio, currently worth up to £750 million.
Minister for the Cabinet Office, Francis Maude, said: “Energy for Growth will use the Government’s clout as the biggest energy customer to shape the market for the good of the country.”