The renewables sector has welcomed a consultation proposing that mature ‘pot 1’ technologies – onshore wind and solar – will be allowed to compete in a Contracts for Difference (CfD) auction in 2021, saying the return of price support will unlock billions of pounds of investment, create many new jobs and allow the energy system to be decarbonised at the lowest cost to consumers.
Environmental groups were informed of the decision earlier this morning (2 March) in a meeting at 10 Downing Street with the new business and energy secretary Alok Sharma.
Neither technology has been allowed to bid for CfDs since the first competitive auction in 2015 and growth has stalled in recent years following the closure of the Renewables Obligation and Feed-in Tariff schemes to new applicants.
From a high of 2,683MW in 2017, onshore wind installations fell for the second year running in 2019 to just 629MW. According to recent figures from the government’s renewable energy planning database, the pipeline of shovel-ready onshore wind and solar projects has swollen to 4.6GW and 1.5GW respectively.
Here’s how people have reacted to the latest news:
Hugh McNeal, chief executive, RenewableUK
“The government is pressing ahead with action to meet our net zero emissions target quickly and at lowest cost to consumers and businesses. Backing cheap renewables is a clear example of the practical action to tackle climate change that the public is demanding, and this will speed up the transition to a net zero economy.
“As one of the UK’s cheapest power sources, new onshore wind projects will be a huge boost for jobs and investment in local economies across the UK”.
Chris Hewett, chief executive, Solar Trade Association
“Today’s announcement marks a major shift in the right direction for government policy on onshore renewables, and a welcome opportunity for the solar industry.”
“New clean power auctions for Pot 1 technologies will accelerate the decarbonisation of the power sector and drive the shift towards net zero, bringing with it new jobs, cheaper electricity and opportunities closer to home for Britain’s highly experienced solar investors.”
“The government is backing a winner in solar, which is not only the UK’s most popular energy technology, but also highly cost-effective and one which offers unique opportunities to enhance local biodiversity and agriculture.”
Audrey Gallacher, interim chief executive, Energy UK
“In line with Energy UK’s long-standing position, we welcome greater support for onshore wind – one of the lowest-cost, low-carbon technologies – which can now play a pivotal role in helping us reach our net-zero target and deliver benefits for the environment, customers and the wider economy.
“This will send strong and positive signals which will allow industry to invest, plan, and deliver new low carbon generation at the lowest cost to consumers. To fully unleash the full potential of onshore wind, we would also encourage the government to also review planning rules so that applications for new onshore wind turbines in England face a fair and reasonable local planning process and are treated in the same way as other renewable or low-carbon energy projects.”
Jim Smith, managing director of SSE Renewables, welcomed the move, saying it made “absolute sense”.
He added: “In addition to the CfD auctions for new onshore build projects, SSE Renewables believes that a market design is needed which ensures that existing renewable projects can be repowered, so that already operational clean power isn’t lost from the system. This design should include a mechanism that maintains a strong carbon price. We look forward to engaging with the UK Government in the months ahead to play our part in supporting the development of the next CfD round.”
Dr Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit
“Generating more electricity from solar panels and onshore wind is one of the simplest ways of cutting energy bills for British families and businesses. Rapid technological development alongside effective policies to lock in long-term low prices mean that building more cheap renewables is good for the climate, for our wallets, and for thousands of small and medium-sized businesses that are behind the UK’s renewable revolution.
“More onshore wind and solar are vital in creating the clean power system that will underpin the UK as it becomes a carbon neutral nation. By backing technologies that have overwhelming support from the public, the government has a real opportunity to close the gap on our carbon targets and to set a global example as delegates from around the world prepare for the UN climate conference on British soil in November.”
Claire Mack, chief executive, Scottish Renewables
“This announcement is recognition that, as Scottish Renewables and others have said for many years, onshore wind and solar PV provide the cheapest way to tackle climate change while delivering economic benefits across the UK…
“Scotland, with its enviable wind resource, is already home to the majority of the UK’s onshore wind power. We also have the majority of its consented capacity – that is, wind farms with planning permission, which are ready to build today.
“Access to the Contracts for Difference mechanism does not mean subsidy. These most competitive of projects will be delivered at prices far below the wholesale cost of power, with a Scottish Renewables study in 2017 showing they will actually deliver money back to government.
“Our robust planning system has already delivered gigawatts of onshore wind while giving communities a say on their construction. We have already called for communities to be involved earlier in the planning process so it’s good news that today’s announcement will strengthen that principle.”
Sam Hall, director, Conservative Environment Network
“I am delighted that there will be a new auction for onshore wind and solar. They are the most cost-effective forms of new energy generation and so will help us get to net zero in the most cost-effective way.
“Polling shows that a large majority of people support onshore wind, however it is right that the planning system will give communities the final say over new projects in their areas. This is another powerful example of UK climate leadership ahead of the UN Climate Summit in Glasgow and another major boost to the UK’s green economy.”