The flagship renewables initiative will generate 3.7 GW of pure domestic energy to power two million homes.

Many clean energy projects were awarded funding from the government’s flagship renewables scheme today, enabling the UK to grow the economy, achieve net zero, protect families and businesses from volatile global petrol prices and strengthen energy security.

In the first annual Contracts for Difference round, 95 clean energy initiatives were awarded funding, an increase from the previous round’s total of 93. 

The most recent round received budget funding of £227 million and secured enough energy to power two million households.

Many solar energy, onshore wind, and tidal energy projects receive funding today. Geothermal initiatives, which use an underground natural heat source to generate electricity, have been successful for the first time.

Initiated in 2014, the Contracts for Difference scheme ensures that projects receive a government-guaranteed price for the electricity they will generate, giving businesses the confidence to invest in the UK.

Contracts are awarded through a series of competitive auctions in which the lowest-priced proposals prevail, ensuring consumers receive value for their money. This year’s auctions were divided to ensure that new, less-established energy sources do not have to compete for funding with long-established technologies, providing developers with certainty and maintaining the UK at the forefront of the renewables industry.

Minister of Energy and Climate Change Graham Stuart stated: “Our first annual Contracts for Difference auction saw many successful initiatives across solar, onshore wind, tidal power, and, for the first time, geothermal energy.”

“Offshore wind is central to our efforts to decarbonize our electricity supply, and we remain committed to our goal of constructing 50 GW of offshore wind capacity by 2030, including as much as 5 GW of floating wind. Last year, the UK installed 300 new turbines, and we will continue to collaborate with the industry to maintain our global leadership in this vital technology.”

This year’s record-breaking CfD round builds on years of renewables growth under this administration. 

In 2010, only 7% of our electricity came from renewable sources. Still, by the first quarter of this year, that number had risen to 48%. This first annual auction will enable us to power more of Britain with British energy.

New solar projects have secured half of this year’s total capacity, while onshore wind projects have delivered nearly 1.5GW of capacity and secured more than double the number of projects (24) compared to last year’s round (10). In addition, a £10 million ring-fenced budget for the tidal stream helped yield 11 projects with a record capacity of over 50MW in the most recent round. 

Additionally, for the first time in the scheme’s history, there are three winning geothermal initiatives totalling 12MW of capacity. This will generate sufficient electricity to power two million households.

Offshore and floating offshore wind do not feature in this year’s allocation, which is consistent with similar outcomes in countries such as Germany and Spain, due to the global rise in inflation and its impact on supply chains, which presented challenges for projects participating in this round.

The government remains committed to procuring 50GW of offshore wind capacity and 5GW of floating offshore wind by 2030, making the industry a British success story. The UK is home to four of the world’s five largest operational wind farms, and just last year, 300 new offshore wind turbines were installed, with Contracts for Difference contributing to 29GW of total wind capacity and powering approximately 24 million homes.

From 2010 to 2020, the UK attracted nearly half of all offshore wind investment in Europe, amounting to approximately £48 billion, making it the largest market for capital expenditure commitments. In addition, the £160 million Floating Offshore Wind Manufacturing Investment Scheme has been launched, providing funding for port infrastructure initiatives to facilitate the widespread deployment of floating offshore wind.

The government evaluates its approach before each Contract for Difference round, and with the introduction of annual auctions, project developers, including those in the offshore wind industry, will now have more opportunities to participate.

This will also enable the government to respond more swiftly to ensure that the scheme continues to support the sector, maintain investment, and sustain its success.

Already preparing for the sixth round of auctions in 2024, the government anticipates the participation of offshore and inflatable offshore wind in the future.

Additionally, approximately £100 billion of private investment is anticipated to flow into the UK’s energy transition, supporting up to 480,000 employees by 2030, including 90,000 offshore wind jobs.