The £730m allocated by the UK government for Contracts for Difference (CfD) will leave an emissions reduction low-carbon power policy gap of up to 70 terawatt-hours, according to the Committee on Climate Change (CCC).
In an assessment of the UK’s Clean Growth Strategy, the CCC said BEIS would need to contract an additional 50-70TWh of low-carbon power beyond existing CfD funding to avoid missing its 2030 carbon reduction target of 62% below 1990 levels.
The statutory body recommended the UK commits to CfD contracts for a further 80-100TWh of low-carbon generation beyond the delivery of planned auctions and Hinkley Point C.
The CCC estimates the £730m pot for CfDs supporting projects delivering power in the 2020s could procure around 55TWh of low-carbon generation.
Last year’s CfD2 auction secured 3.2GW of offshore wind capacity and 200MW of other technologies, equivalent to approximately 14TWh of generation.
Prior to the auction, the CCC estimated the £730m funding would secure around 25TWh of low-carbon generation.
The CCC said the UK’s government’s spending commitments for renewables imply an expansion of renewable generation to meet 50% of UK demand by 2032.
“This could be increased at no cost to bill payers by also offering contracts to onshore wind and solar developers,” it added.
“Estimates from both government and industry suggest onshore wind is the cheapest form of new build generation in the UK.”
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By EBS