The UK government has pledged financial support to eight major new renewable energy projects targeting to power millions of homes.
The schemes include five from the offshore windfarm, which the Conservative Party is planning to back in its general elections’ manifesto.
The projects aim to create 8,500 jobs and add 4.5GW to the national grid, accounting for 4% of the UK’s generating capacity, or enough power to support 3 million homes. The projects were worth up to £12bn in private sector investment, according to the government.
All the projects will add 2% to an average household electricity bill by 2020, or £11 per household, but Ed Davey, energy and climate secretary, said the government’s “whole package” on energy reforms will decrease consumer energy bills.
Saying that the projects will mark Britain’s energy boon, Davey added that these are the first investments from government’s reforms to build the world’s first low carbon electricity market – reforms that will see competition and markets attract tens of billions of pounds of vital energy investment while reducing the costs of clean energy to consumers.
As a part of a transition to a new subsidy regime, these agreements are part of others being phased out for 2017. The industry welcomed the move but said the UK needed more onshore windfarms, which Tories are considering capping.
Deputy chief executive of trade body Renewable UK Maf Smith said they were pleased to see the vote in confidence for the five offshore wind projects, which will significantly contribute to keeping the lights on, and create the much needed growth in coastal areas.
He however said that they need more onshore and offshore wind projects in the coming decade if they don’t want to find their energy security under threat, and the UK’s further exposure to price shocks from imported fossil fuels.
Some of offshore wind projects include Dong Energy’s 250MW Burbo Bank extension in LiverpoolBay, Statoil/Statkraft’s 400MW Dudgeon off the Norfolk coast, 1.2GW consortium-backed windfarm off the Yorkshire coast, and Dong Energy’s 660MW extension off Cumbria coast.
Additionally, three biomass projects have been given the go-ahead, including the conversion of a Britain’s largest coal power plant, Drax, located in North Yorkshire, Lynemouth power Station in Northumberland, and MGT’s Teesside plan in Middlesborough.
Drax’s second unit contract was turned down, which led its owner to announce legal proceedings against the government.
Chief executive of Drax Dorothy Thompson said although they were pleased to get an investment contract for their third unit conversion, they were disappointed by the decision on the eligibility of their second unit, adding that sustainable biomass provides a very reliable, flexible, and cost effective renewable power source for UK residents.
Announcing that the contracts agreements were part of the government’s package of measures leading to lower household package bills, Davey had earlier taken a shot at the previous Labor government’s record on renewable energy stating that the record levels of energy investment were at the forefront of the government infrastructure program and were filling the massive gap that they inherited. He also emphasized on the need to keep lights on, and tackle climate change while giving investors more confidence.
The government said it has channeled more than £30bn in renewable energy generation investment from 2010, creating thousands of job opportunities.