Renewable electricity projects will compete for £300 million in support this autumn with up to £235 million dedicated to less established technologies, such as offshore wind and marine.

Energy and Climate Change Secretary Ed Davey said the budget includes an increase of £95 million from the indicative budget published in July,

The increased budget will be split between different types of technologies:

• Established technologies, such as onshore wind and solar, will compete for up to £65 million in support, reflecting the fact that these technologies are already more competitive.
• Less established technologies, such as offshore wind and marine, will share in up to £235 million, demonstrating the Government’s commitment to helping these technologies become as competitive as the more established low carbon generation sources.

The funding for Contracts for Difference (CFD), which provides long-term certainty for investors, are a cornerstone of the Government’s reforms to the electricity markets, designed to drive investment in a new generation of clean, secure electricity supplies.

Mr Davey said:

“We are transforming the UK’s energy sector, dealing with a legacy of underinvestment to build a new generation of clean, secure power supplies that reduce our reliance on volatile foreign markets.

“Average annual investment in renewables has doubled since 2010 – with a record breaking £8 billion worth in 2013. By making projects compete for support, we’re making sure that consumers get the best possible deal as well as a secure and clean power sector.”

This year’s CFD budget will be split between technology pots. Within each pot technologies will compete against each other, but less established technologies are not expected to compete against the established technologies.

• Pot 1 (established technologies): £50m for projects commissioning in 2015/16, and an additional £15m (i.e. £65m in total) for projects commissioning from 2016/17 onwards.
• Pot 2 (less established technologies): £155m for projects commissioning from 2016/17 onwards, and an additional £80m (i.e. £235m in total) for projects commissioning from 2017/18 onwards.
• Pot 3 (biomass conversion): No budget released in 2014.

Established technologies include: Onshore wind (>5MW), Solar Photovoltaic (PV) (>5MW), Energy from Waste with CHP, Hydro (>5MW and <50MW), Landfill Gas and Sewage Gas

Less established technologies include: Offshore Wind, Wave, Tidal Stream, Advanced Conversion Technologies (ACT), Anaerobic Digestion (AD), Dedicated biomass with CHP, Geothermal and Scottish Islands onshore wind.

The projects that win the auction will receive 15 year contracts - meaning that the total spend per year for contracts allocated in the first allocation round this autumn will be up to £300m.

The budgets for next year’s auction will be confirmed in 2015, but £50 million more has already been indicated for established technologies, with significant further funding potentially available to fund further projects, including renewables and Carbon Capture and Storage, by 2020-21.

The Government also confirmed that the Renewables Obligation will close to new large-scale solar above 5MW from 1 April 2015.