UK unveils largest round of clean energy grants


The UK has unveiled its largest round of clean energy grants, including for 10 onshore wind projects, signaling a revival for a sector that has been virtually banned in the UK in recent years.

Grants, known as “contracts for difference”, have also been awarded for 7 gigawatts of offshore wind power and for new technologies such as floating wind power and tidal power.

The results showed that offshore wind has become the cheapest form of clean energy in the UK, beating solar and onshore wind as the cheapest type of renewable energy.

The grants will support 11GW of electricity, equivalent to the total capacity of all UK offshore wind farms in operation today, if all listed projects are built.

Ørsted, Vattenfall and Scottish Power were among the winners of offshore wind grant contracts, which run for 15 years from project delivery.

Kwasi Kwarteng, business and energy secretary, said the auction price would provide as much energy as about six gas-fired power stations.

“The more clean, cheap energy we produce within our own borders, the better protected we are against gas price volatility that drives up bills,” Kwarteng said.

Aris Karcanias, energy and utilities manager at PA Consulting, said the result was “astonishing” and “more than anyone could have imagined”.

“Offshore wind is now one of the cheapest forms of energy,” he said.

Onshore wind, which was excluded from past grant allocations, has also made a comeback, securing nearly 900 MW of projects.

RenewableUK, the clean energy trade body, estimated the awarded projects would attract around £17.8bn in investment.

Spokesman Luke Clark said including floating wind and tidal power in the cycle would boost these new forms of energy.

“These are technologies that the UK has been developing for years, and now we’re at the point where we can really scale and invest,” Clark said.

Under the CfD system, developers are guaranteed a minimum “strike price” for the electricity they sell. But they have to pay back into the pot when power prices are high, so they don’t take the gains during times when prices are rising, like today.

The UK attribution system requires developers to disclose how they will source components and how much of their project will come from the UK. This clause triggered a legal complaint by the EU to the World Trade Organization earlier this year.

This latest round of the grant scheme could cost the government more than £230m a year by 2028, according to estimates provided by the Department for Business, Energy and Industrial Strategy (measured in 2012 currency ), although the number can vary considerably depending on electricity prices. .

Supply chain issues and the high cost of raw materials such as steel have been a problem for wind and solar project developers in recent months.

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