U.K. Pricing Deal for 4,500 MW of Green Power

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) - The companies behind eight renewable energy projects with a combined generating capacity of 4,500 megawatts (MW) have signed contracts under the U.K. government's new subsidy scheme.

The projects, ranging from windfarms to biomass, have agreed terms under the new electricity pricing scheme known as Contracts for Difference (CfD), which replaces the old Renewable Obligations Certificate (ROC) scheme. CfD guarantees prices for electricity generated by the projects, making it easier for renewable energy suppliers to move ahead with final investment decisions that will get the projects off the ground. The government believes that the projects will attract up to €14.6 billion ($20.2 billion) in private sector investment and support up to 8,500 jobs.

Energy Minister Michael Fallon claimed the eight projects will be able to generate 15 terawatt hours (TWh) of electricity, equivalent to 14% of the country's renewable electricity total by 2020. They will also help eliminate around 10 million tons of CO2 (MtCO2) from the U.K. power sector each year, compared to fossil-fuel power plants.

The government's Department of Energy and Climate Change (DECC) first revealed the chosen projects in May. For additional information, see May 2, 2014, article - U.K. Supports Eight Key Renewable Projects .

U.K. Energy and Climate Change Secretary, Edward Davey, stated: "The power sector is the single largest source of U.K. carbon emissions. By 2050, carbon emissions from the power sector need to be close to zero to ensure that the net U.K. carbon account for the year 2050 is at least 80% lower than the 1990 baseline and enable the statutory target under the Climate Change Act 2008 to be met. Government modelling suggests that around 60--80GW of new electricity capacity will need to be built by 2030, and of this around 40--70GW will need to come from low carbon technologies, of which renewable electricity could provide 35--50GW".

He added that ensuring the security of electricity supply to will be vital in the years ahead. "With the potential electrification of heating, transport and industrial processes, average electricity demand may rise by between 30% and 60% by 2050. By 2020, the U.K. could be importing nearly 55% or more of its gas".

Davey argued that the eight projects will play a large role in offsetting imports and securing supply.

The projects comprise five offshore windfarms and three biomass projects:

• Beatrice offshore windfarm (664 MW) in the Outer Moray Firth, Scotland

• Burbo Bank offshore windfarm (258 MW) in Liverpool Bay

• Dudgeon offshore windfarm (402 MW) at the Wash, north of Cromer, Norfolk

• Hornsea 1 offshore windfarm (1,200 MW) off the East Yorkshire coast

• Walney extension offshore windfarm (660 MW), off Walney Island in the Irish Sea

• Drax Unit 1 biomass conversion unit (645 MW) at Selby in North Yorkshire

• Lynemouth biomass conversion (420 MW) at Ashington in Northumberland

• Teesside biomass with combined heat and power (299 MW) in Middlesbrough

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