DECC Releases Proposals for Renewable Energy Support

The UK Department of Energy and Climate Change (DECC) has unveiled proposals to maintain the growing momentum behind renewable electricity investment in the UK, while continuing to deliver value for money for consumers.

Since 2010 the UK’s renewable electricity capacity has doubled; in the same period, over £34 billion of private sector investment has been announced, with the potential to support almost 37,000 jobs.

The proposals are about ensuring the right balance of support for renewables and a smooth transition to the Government’s new Contracts for Difference, securing the further investment needed to provide clean, green and secure energy, whilst continuing to deliver value for money for energy bill-payers.

DECC has confirmed that the budget for Contracts for Difference renewables spending will be divided into groups, including (a) established technologies and (b) less established technologies.

A number of criteria were used to select the appropriate grouping of each technology including: the maturity of the technology and industry; levels of UK and global deployment now and in the future; the potential for further cost reductions; and contribution to future decarbonisation.

Established technologies

Technologies in the established group have benefited from significant cost reductions following early research and development and as a result are, in some cases, taking forward large scale deployment.

Included in this category are: onshore wind greater than 5MW; solar photovoltaic greater than 5MW; energy from waste with combined heat and power (CHP); hydro between 5MW and 50MW; landfill and sewage gas.

These technologies will compete with each other for support from the first allocation of Contracts for Difference, helping to reduce costs and ensure that consumers get good value for money.

Less established technologies

Less established technologies have a range of characteristics including significant potential for cost reduction and delivery of low-cost renewable generation in the future.

Included in this category are: offshore wind; wave and tidal stream; advanced conversion technologies; anaerobic digestion; dedicated biomass with combined heat and power and geothermal.

Support will be provided to create an investment that enables cheaper competitive development in the longer term. These technologies will only move to auctions if there are more applicants for Contracts for Difference than are affordable within the budget.

In addition, DECC is also launching a consultation under EMR on:

• proposals to treat biomass conversions as a separate technology group, and Scottish Islands onshore wind projects as either part of the “less established” technology group, or as a separate technology group;
• a minimum allocation for wave and tidal stream to ensure that budget is available for at least 100MW to be deployed.