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Contracts for Difference

Volume 672: debated on Monday 2 March 2020

I am today confirming details of the next round of the contracts for difference scheme, which opens in 2021. The latest round will be open to renewable technologies including onshore wind and solar, with proposals to introduce floating offshore wind. This could see millions more homes powered by clean energy by the end of the decade, and a boost for the supply chain, adding to the 20,600 jobs and the £628 million of exports each year already supported by the renewables industry.

Today my Department is publishing a consultation on proposed changes to the contracts for difference scheme. We have made huge strides to decarbonise our energy system, moving the power sector away from its reliance on fossil fuels towards a cleaner, greener future. In 2018 the collective share of UK electricity generation from renewable sources was 33%. Our target of reaching net zero emissions by 2050 requires the UK to bring all greenhouse gas emissions to net zero by 2050.

Delivering net zero will require change across the whole of society, and I am therefore more mindful than ever of the importance of meaningful engagement with local communities on the measures in this transition that affect them the most. Local communities will have a more effective voice on developments that impact them, through proposals for tough new guidance on community engagement for developers of onshore wind across Great Britain, also announced today. They will have a definitive say on whether projects are allowed to proceed. It will remain the case that no English onshore wind project can proceed without the consent of the local community.

This challenge means we will need to make the most of multiple technologies available. 2020 is the year of climate action and this decision is a crucial part of the Government plans to go further and faster in tackling climate change. In the same manner I will be encouraging other countries to increase their own ambition ahead of COP26 later this year.

Today’s consultation outlines proposals to ensure the contracts for difference scheme can support the increased ambition required, including proposals to build on our world-leading position on offshore wind by introducing floating offshore wind into the scheme as well as proposals to support our renewable supply chain to enhance productivity and increase competitiveness.

I will place in the Libraries of both Houses, copies of the “Contracts for Difference for Low Carbon Electricity Generation - Consultation on Proposed Amendments to the Scheme” which sets out further information on proposals for engaging communities.