The UK government has opened the window for offshore wind developers to submit their applications for newly introduced Clean Industry Bonus payments offered under London’s flagship Contracts for Difference scheme.
The application window for the CfD CIB scheme, which applies for the first time to fixed bottom and floating wind projects from this year’s Allocation Round 7 and is an eligibility requirement for entry in the full CfD auction, will run for 43 working days until 14 April.
The payments will be made at a rate of £27m per GW of capacity applying to the CIB to developers who have pledged to increase the sustainability of supply chains.
This could include investing in new factories and supporting highly skilled jobs in economically disadvantaged areas across the UK or choosing less polluting suppliers to build their projects.
Energy Secretary Ed Miliband (pictured) said: “We are backing our proud manufacturing, coastal and oil and gas communities with good jobs, skills and private sector investment – delivering on the government’s Plan for Change.
“This is our clean energy superpower mission in action, kickstarting growth, delivering energy security and transforming towns and cities as part of the transition – from the ports of Nigg and Leith to the manufacturing hubs of Blyth and Hull.”
Steve Foxley, chief executive of the Offshore Renewable Energy (ORE) Catapult, added: “This news is an important signal from government to industry of intent to grow our offshore wind sector in a way that benefits both our climate and our economy, supporting expansive regional job creation and bolstering national energy security.
“Alongside innovating to develop next-generation technologies, delivering the right levels of future deployment and fulfilling the ambitions of the Industrial Growth Plan for offshore wind, it will drive up confidence in our ability to secure the clean investments we need in the years to come.”
Dan McGrail, chief executive of RenewableUK, said:” The offshore wind industry already employs over 34,000 people in the UK, but there’s an opportunity to treble this number by the end of the decade if we grow the sector’s supply chain.
“Government initiatives like the Clean Industry Bonus, coupled with industry initiatives to support innovation and the upcoming Industrial Strategy, could drive hundreds of millions of pounds of private investment into new manufacturing.
“Whilst we’re right to focus on securing investment in manufacturing new turbine foundations, blades and cables, we shouldn’t forget that there are also thousands of jobs in the construction and maintenance of wind farms too.
“You can go to places across the country like Grimsby and Great Yarmouth and Buckie on the Moray Firth and see boats full of engineers ensuring our wind farms operate at maximum efficiency.”
Dhara Vyas, Energy UK chief executive, said: “Offshore wind is set to become the backbone of a decarbonised power system.
“To build an industry that is resilient to supply chain challenges, we need a framework that supports sustainable deployment, while fostering investment in the UK’s industrial heartlands.
“The Clean Industry Bonus will help to unlock economic growth, create job opportunities, and maintain the UK’s position as a global leader in offshore wind.
“Alongside the development of a broader industrial strategy, the Clean Industry Bonus will play an important role in strengthening the Contracts for Difference mechanism.
“Clarity will be critical in ensuring we can deliver Allocation Round 7, which is likely to be the single most important auction to achieving the Clean Power goal.”
The bonus will come with an initial £27m per GW of offshore wind projects. That means if developers commit to 7-8GW of offshore wind, up to £200m of funding could be made available.
Funding will be allocated competitively with the results announced by the Energy Secretary in the summer.
RenewableUK Cymru’s Director, Jess Hooper said: “As one of the UK’s highest carbon-emitting regions, we have a once-in-a-generation chance to turn the tide on fossil fuels, replacing them with clean, homegrown power while attracting major investment and economic growth through initiatives like the Clean Industries Bonus.”