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14/11/2016

Contracts for Difference details laid out

Words: Laura Edgar
Greg Clark

The government has set out details for the next Contracts for Difference auction in which companies will compete for the first £290 million worth of contracts for renewable electricity projects.

The government said the second Contracts for Difference auction would result in enough renewable electricity to power about a million homes and reduce carbon emissions by around 2.5 million tonnes a year from 2021/2022 onwards.

The application process for the Contracts for Difference allocation round will open in April 2017.

At the same, the government set out proposals for the next steps to phase out the generation of electricity from unabated coal-fired power stations within the next decade.

This plan, according to the government, aims to bolster confidence that the UK is open to investors in new, cleaner energy capacity as it transitions from coal to gas and builds a “diverse energy system” that gives the UK “greater security of supply”.

Energy secretary Greg Clark said: “This is a key part of our upcoming industrial strategy, which will provide companies with the further support they need to innovate as we build a diverse energy system fit for the 21st century that is reliable while keeping bills down for our families and businesses.”

These measures, the government explained, form part of its plan to upgrade the UK’s energy infrastructure, lower its carbon emissions and “spur on the growth of large scale, low-carbon energy”, which is part of the Paris Agreement.

Additionally, the government is to look at putting an end to uncertainty over whether onshore wind projects on remote islands should be treated differently from onshore wind projects on mainland Great Britain.

Scottish energy minister Paul Wheelhouse said he was disappointed and angry with decision by the UK to put an end to Contracts for Difference on remote islands.

“The Scottish Government repeatedly sought assurances from UK Government ministers about their plans to support renewable energy projects through the Contracts for Difference auction.

“The UK Government has misled Scottish ministers and the members of the Scottish Island Renewable Delivery Forum on the promised support for island wind projects.”

He said the Scottish Government and the island councils asked the UK Government for a meeting of the Scottish Island Renewable Delivery Forum on numerous occasions in the last year, but received no response.

“At no time was it suggested there would be a further consultation. We now call upon the secretary of state to reconvene the forum and have the courtesy to explain this decision to those affected in person,” said Wheelhouse.

Lesley Griffiths, the Welsh cabinet secretary for environment and rural affairs, said the Welsh Government remains committed to the decarbonising of its energy sector.

“However, once again, the UK Government is acting unilaterally in threatening jobs and investment in Wales through its announcement about Contracts for Difference funding for renewable electricity.

“Once again, ideology appears to be driving UK thinking rather than ensuring we have a sufficient mix of affordable low-carbon technologies now, and in the future.”


Griffiths’ full statement can be found on the Welsh Government website.

Wheelhouse’s full statement can be found on the Scottish Government website.


The consultation for Coal Generation In Great Britain: The Pathway To A Low-carbon Future can be found here. The consultation closes on 1 February 2017.

Image credit | Department for Communities and Local Government

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