The UK’s Labour government has been praised for increasing the budget by 50% for this year’s Allocation Round 6 renewables auction.
Industry experts and green groups have today welcomed the move by Keir Starmer’s (pictured) administration, which puts the total funding available at almost £1.6bn, including £1.1bn for offshore wind.
Scottish Renewables chief executive Claire Mack said “the welcome increase to the Allocation Round 6 budget sends a positive signal to industry that the UK government is serious about achieving its clean power mission”.
She added: “To maintain our globally competitive advantage, empower our supply chains and enrich our communities, it is essential that we enable deployment at pace across all clean energy technologies through the Contracts for Difference scheme.
“Unleashing the full potential of Scotland’s renewable energy pipeline, in particular floating and fixed offshore wind, will require building on Allocation Round 6 to maximise deployment through future allocation rounds.
“This will drive economic growth, deliver energy security and achieve the UK Government’s clean power mission.”
Jessica Hooper, RenewableUK Cymru director added: “Renewable energy can be the engine that drives growth and wealth creation in Wales, and as a new, emerging technology, floating offshore wind is the jewel in the crown we need to succeed in Wales.
“It is our opportunity to kickstart a burgeoning new industry that unlocks thousands of jobs and puts us at the helm of our own homegrown, clean power.
“While most government contracts from this latest clean energy auction will be available to develop fixed offshore wind power, we welcome the budget uplift from £105m to £270m for emerging technologies, like floating offshore wind.
“However, this is still not enough to deliver all eligible UK projects.
“Moving forward, in future allocation rounds, we need to guard against unwanted regional competition and ensure that as many new offshore windfarms as possible are built, including the test and demonstration sites in the Celtic Sea, to encourage innovation and drive cost reduction.”
Mark Sommerfeld, deputy director of policy at the REA (Association for Renewable Energy and Clean Technology), said: “Increasing the Contracts for Difference (CfD) budget is a critical step towards a secure, affordable, and decarbonised power system.
“It is reassuring to see the new Government move at speed, putting the UK back on track, and helping secure significant amounts of new offshore wind and solar capacity, in particular.
“These are the lowest cost forms of power generation, while also helping to underwrite UK supply chains, skills and jobs.
“With such budget increases, Government should also be utilising the CfD to deliver similar success stories across a range of renewable technologies.
“Government should look to remove the caps on the amount that technologies like geothermal can receive through the auction, ensuring less established technologies are also able to mature.
“This is critical to delivering a diverse and resilient power system for the UK and one that can meet the Government’s mission for a decarbonised power system by 2030.”
Senior research analyst at Aurora Energy Research Tom Betts said the budget boost “sends an important message that the new Labour government are serious about accelerating the deployment of renewables in Great Britain”.
“The budgetary increase includes a record £1.1bn of support for offshore wind, £300m more than the budget set by previous government (in 2011/2012 prices). Assuming an auction clearing price of £60/MWh, this auction could deliver 5.8GW of offshore wind capacity, 1.6GW more than under the previous budget.
“This unprecedented support combined with increased administrative strike prices means the auction this year will likely see much more competition than allocation round 5 last year, which failed to attract participation from any offshore wind bidders.”
Greenpeace UK policy director Doug Parr also welcomed the move.
“It’s also a significant win for the economy too,” he said.
“This boost to funding for wind and solar projects can and should be used to create new jobs and provide opportunities to local communities across the country and drive innovative new technologies.”
Green Alliance senior policy analyst Liam Hardy added: “To meet its promise of clean power by 2030 in time, the government needs to get contracts signed for a huge amount of new renewable power this year and next. A reported £1.56 billion budget sends a message that Ed Miliband is serious about getting it built.”
However, several experts warned the budget may not be enough to get the renewables sector back on track or deliver Labour’s capacity targets for this decade.
“Whilst this budget will accelerate the deployment of renewable capacity in the coming years, it is unlikely to fully deliver Labour’s ambitious manifesto pledge to double onshore wind, treble solar and quadruple offshore wind capacity by 2030,” said Aurora’s Betts.
Greenpeace’s Parr said the £500m boost “needs to be followed up with an even bigger auction next year, faster grid connections, and more storage to hold the green power for when it’s needed”.
Hardy meanwhile said the big picture is that overall deployment of offshore wind is substantially off target.
With the increased budget, this sixth round might buy up to 4GW-6GW of offshore wind, leaving 15GW-18GW left to procure in 2025, he said.
“A tall order. The government will need to pull out all the stops ahead of next year’s action, from reflecting real energy prices more closely to speeding up connections to the grid.”
London has also announced it will increase the tidal stream ringfence in this year’s renewable auction from £10m to £15m.
This is expected to contract an additional 25MW of tidal stream capacity to the UK’s deployment pipeline, according to the Marine Energy Council.
Chair Sue Barr said: “The UK government has demonstrated international leadership in increasing the tidal stream ringfence to £15m. This is an important step forward in realising the potential of this entirely predictable renewable energy resource.
“The UK can lead the world in harnessing the power of its tides, and in exporting tidal stream technology and its expertise around the world.
“The government’s ambition is to make Britain a clean energy superpower. We believe that tidal stream will be a key technology in realising that mission.”