Record investments of £40 billion in renewable electricity to bring green jobs and growth to the UK
£40 billion of investments are expected in renewable electricity generation projects, following updated contract terms and strike prices published today.
Additional investments of around £40 billion are expected in renewable electricity generation projects up to 2020, following updated contract terms and strike prices published today and wider reforms to the electricity market.
Sixteen renewable generation projects also reached the next stage of Final Investment Decision Enabling for Renewables (FIDeR) process today, which could be supported either through investment contracts or the enduring Contracts for Difference (CfD) regime.
There is currently over 20GW of renewables capacity operational in the UK – a figure that could double by 2020 as a result of the Government’s reforms. We have a very healthy pipeline in key technologies, with a total of almost 11GW of offshore and onshore wind with planning consent and awaiting construction. And if all the 8GW of projects which are proceeding under FIDeR are built through investment contracts or under the enduring CfD regime they could contribute around 30% of the new renewables generation we need by 2020.
The UK is now on track to meet that target, and will have doubled the amount of electricity generated from renewables from 15 per cent to over 30 per cent by 2020.
Energy makes up 58 per cent of the total infrastructure pipeline in Government’s National Infrastructure Plan. Investment in renewables, Carbon Capture and Storage technology, new nuclear and gas is required to replace 10-12 per cent of current power generating capacity, which is due to close over the coming decade.
The updated contract terms and strike prices will help to build a low-carbon energy mix to keep the lights on, reduce emissions and bring green jobs and growth to the UK.
The additional investment will generate enough clean power for 10 million homes, and reduce carbon dioxide emissions by over 20 million tonnes.
Increasing the amount of home-grown renewable energy will boost energy security, reduce reliance on imported fossil fuels, and support up to 200,000 jobs by 2020.
In total, these reforms will help to support up to £110 billion of additional investment across the electricity sector by 2020,helping to insulate Britain from future world gas price increases and boosting jobs and growth in every region of the UK.
Energy and Climate Change Secretary Edward Davey said:
“This package will deliver record levels of investment in green energy by 2020. Our reforms are succeeding in attracting investors from around the world so Britain can replace our ageing power station and keep the lights on.
“Investors are queuing up to express their interest in these contracts. This shows that we are providing the certainty they need, our reforms are working and we are delivering ahead of schedule and to plan.
“With sixteen new major renewable projects progressing in our “go early” stage we are delivering ahead of schedule and are able to begin the move to the worlds first low carbon electricity market faster than expected.”
The strike prices and contracts give energy generators a sound, sustainable and long-term basis to invest in renewable energy.
They reinforce the UK’s position as one of the world’s leading renewables markets, and the number one place for business to invest in offshore wind generation.
This will support the growth of the offshore wind industry, with modelling showing that deployment of 10GW by 2020 is achievable, in line with the previously stated range of 8-16GW. This is not a target and actual deployment will depend on technology costs
Given the approach set out in the recent European Commission guidance, it is expected that the new state aid guidelines will require the UK to move to competition for more established technologies. The Government will confirm its approach and details of how this will operate through the Delivery Plan and engagement with stakeholders early in 2014.
The contracts will be delivered from within the Levy Control Framework, and is consistent with the plans announced this week reducing the average household bill by £50 a year by early 2014