The UK government is seeking to clear the way for more offshore wind projects as it today launched a consultation on proposed reforms to this year’s AR7 Contracts for Difference (CfD) auction.
The UK is already home to the three largest operational offshore wind farm projects in the world but must secure more to deliver clean power by 2030.
The proposed reforms include relaxing the eligibility criteria on planning consent for fixed-bottom offshore wind, helping to speed up new developments.
The government also wants to change how offshore wind budgets are set and published, enabling funding to be invested more efficiently.
In addition, the government is proposing to increase the CfD contract term beyond the current 15 years, in a bid to make renewables contracts more cost-effective.
The CfD scheme is the government’s main mechanism for supporting low-carbon electricity generation, incentivising investment in renewable energy by protecting developers from volatile wholesale prices.
Renewable energy developers who meet the eligibility requirements can apply for a CfD by submitting a form of sealed bid.
There have been six auctions, or allocation rounds, to date, which have seen a range of different renewable technologies competing for a contract.
Last year’s AR6 round delivered a record-breaking 128 renewable energy projects with 9.6GW of capacity – enough to power around 11 million homes.
Today’s reforms set out plans to secure the additional offshore wind the UK needs at a good price, delivering value for money to UK bill-payers.
The UK already has 30.7GW of offshore wind either installed or committed, with a further 7.2GW of capacity consented, against a target capacity range of 43-50GW needed for clean power by 2030.
According to the government, the CfD reforms will enable the UK to go further and faster to secure its position as a clean energy superpower.
Energy Secretary Ed Miliband said: “Last year, we celebrated delivering the most successful auction round in history – now we want to go even further.
“British families and businesses are bearing the cost of the reliance on petrostates and dictators who set the price of gas on the global market.
“Our bold new reforms will give developers the certainty they need to build clean energy in the UK, supporting our mission to become a clean energy superpower and bring down bills for good.”
The proposed changes also include enabling repowering for onshore wind, expanding phased CfDs to floating offshore wind, and increasing the target commissioning window for solar projects from three to six months.
Director of policy at Renewable Energy Association Frank Gordon said: “REA note today’s CfD Allocation Round 7 auction consultation and welcome the proposals on contract length, target commissioning windows for solar projects, and planning.
“However, there are key further changes needed as part of this process, not least the need to support more technologies as they come to the end of existing subsidies – especially landfill gas, which risks significant increases in methane to atmosphere as electricity generation stops being financially viable.”
He added: “We also call for the extension of proposed planning reforms for offshore wind to benefit other technologies which face planning hurdles, such as bioenergy and Deep Geothermal projects.
“Overall the CfD auctions are the critical path for delivering Clean Power 2030 so must support the widest range of technologies to meet our stretching but welcome targets.”
The proposals are the latest actions taken by the government to deliver clean power by 2030 and support growth.
The government has announced the launch of the Clean Industry Bonus, incentivising offshore wind developers to invest in cleaner supply chains and create jobs in industrial communities.
The consultation on reforms to the CfD scheme is open for four weeks until 21 March, with a government response expected ahead of the AR7 round.