The UK government will double the capacity of renewable energy it will subsidise next year as it backs onshore, offshore and floating wind projects, plus solar energy, wind and tidal schemes.
Following the 10-point plan laid out by the Prime Minister last week, the Department for Business, Energy & Industrial Strategy said the fourth round of the contracts for difference (CfD) scheme in late 2021 will aim to double the capacity to 12 gigawatts of renewable energy compared to the 5.8GW at the previous auction in 2019.
It said 12GW could be enough to power 20mln electric cars on the UK’s roads in a year.
Offshore wind will compete for a ring-fenced pot of CfD funding, “given its long-term potential to support the country’s 2050 net zero target”, the government said, with Boris Johnson having already flagged a commitment to raising offshore wind deployments to 40 GW by 2030 as part of making the UK the ‘Saudi Arabia of wind’.
Floating offshore wind projects will be included for the first time, allowing wind farms to be built further away from the shoreline, and these projects will compete for funding with other ‘less-established technologies’, including advanced conversion technologies and tidal.
Solar and onshore wind projects will be able to bid for the first time since 2015, which was announced in March, and these ‘established technologies’ will compete for a third pot.
There are three London-listed funds that are focused on UK solar: NextEnergy Solar Fund Ltd (LON:NESF), Bluefield Solar Income Fund Ltd (LON:BSIF) and Foresight Solar Fund Ltd (LON:FSFL). As for wind, this is the focus of Greencoat UK Wind PLC (LON:UKW), while Renewables Infrastructure Group Ltd (LON:TRIG) invests in both wind and solar in the UK as part of a wider remit.
Former coal-burning power stations, such as those owned by Drax PLC (LON:DRX) that have been converted to biomass generation will be excluded from future CfD rounds.