The U.K. government announced a new commitment to offshore and remote island wind to power millions of homes on Monday.
'Clean electricity auctions will be held in 2019 and every two years from then on, signaling support worth up to £557 million ($731.8 million) for industry,' a government statement read.
Offshore wind and, for the first time, remote island wind providers will be able to bid for contracts to power up to four million homes from Cornwall to the Shetland Isles, it said.
According to the press release, the auctions will make the U.K. 'a beacon for inward investment and provide renewable energy businesses in the North East the certainty to invest and grow'.
This will encourage long-term investment to help reduce the cost of energy, it said.
According to the statement, with wind turbines already providing 15 percent of the U.K.’s electricity, 'today's fresh vote of confidence in the sector will secure its position as a global leader in a thriving industry, enhance confidence and encourage businesses to make long-term investment'.
It said the government had already met its ambition set out in the Clean Growth Strategy to produce 30 percent of its power from renewable sources by 2020-21 and this fresh support would see the country 'secure its position as a world leader in low carbon energy'.
'Today’s announcement confirms that the next Contracts for Difference allocation round for less established technologies such as offshore wind will open by May 2019. The government will hold another allocation round in 2021 and auctions around every two years,' it said.
Depending on the price achieved, these auctions will deliver between 1 to 2 gigawatts (GW) of offshore wind each year in the 2020s.
'The government will look at ways to manage the auctions to ensure smooth delivery of low carbon generation,' it added.
The Contracts for Difference (CFD) scheme is the government's main mechanism for supporting new renewable energy generation projects. Contracts are awarded in a series of competitive auctions, with the lowest price bids being successful – which, according to the statement, drives efficiency and cost reductions.
The government says the scheme has been 'a success, delivering substantial new investment and helping deliver significant reductions in the costs of some renewable technologies'.
The second CFD auction in 2017 saw the clearing price for offshore wind (£57.50/MWh in 2012 prices) halved compared to the first auction in 2015 and secured 3.3 GW of renewable electricity capacity, it added.
By Hale Turkes
Anadolu Agency
energy@aa.com.tr