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The REA responds to the Government’s latest CfD auction
results;
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Lack of offshore wind projects is a notable setback and
could jeopardise UK renewable energy targets and investor
confidence;
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However, awarded funding for three deep geothermal
projects is extremely welcome as well as record numbers of
tidal projects and large amounts of solar and onshore
wind;
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We require a wide variety of technologies to get to net
zero.
The REA (Association for Renewable Energy and Clean Technology)
has responded to the UK's latest Contracts for Difference (CfD)
auction results, announced today.
No new offshore wind projects bids were bought by developers,
calling into question whether the government target of 50 GW of
offshore wind by 2030 is indeed achievable. This news is a stark
reminder that the Government must urgently address the
diminishing levels of UK investor confidence.
However, for the first time, the landmark renewable energy CfD
scheme has awarded funding for three deep geothermal projects,
totalling 12MW. Recognising deep geothermal’ s potential and
seeing shovel ready projects final provided a route to market.
Record numbers of tidal projects and large amounts of solar and
onshore wind are also welcome.
Despite increases in overall clearing prices, this auction
demonstrates that renewables remain the cheapest form of
generation, even with economy-wide inflation and supply chain
constraints that are behind these cost increases.
The REA now urges Government to use the upcoming Autumn Statement
to ensure the next auction appropriately responds to increased
development costs and attractive foreign investment markets, that
are seeing renewable and clean technology finance diverted from
the UK.
Mark Sommerfeld, Deputy Director of Policy for the REA
(Association for Renewable Energy and Clean Technology)
said:
“The UK's latest Contracts for Difference (CfD) auction has
seen a mixed bag of results. The lack of offshore wind projects
is a notable setback. It calls into question whether the
government target of 50 GW of offshore wind by 2030 is achievable
and is a stark reminder that the Government must address the
diminishing levels of UK investor confidence resulting from the
nature of today’s real world investment conditions.
“There was also good news. The first three geothermal
projects clearing the auction is an important milestone for a
technology that has long had significant potential in the UK.
Despite numerous shovel-ready power and heat projects, able to
contribute to the UK’s energy transition, it has lacked a
suitable route to market. Today’s success must be capitalised on
with further funding ringfenced in future CfD allocation
rounds.
“Record numbers of tidal projects and large amounts of solar
and onshore wind are also good news and a reminder that we
require a wide variety of technologies to get to net zero. It is
essential that this new committed generation can now be built out
without having to face any further administrative issues such as
planning or grid capacity constraint delays.
“Despite increases in overall clearing prices, this auction
demonstrates that renewables remain the cheapest form of
generation. The Government must now use the Autumn Statement to
ensure the next auction appropriately responds to increased
development costs and attractive foreign investment markets, that
are seeing renewable and clean technology finance diverted from
the UK.”
