Eight major renewable electricity projects have been unveiled as part of the government’s electricity reforms. The contracts are the first awarded under the new Contracts for Difference (CfD), which form part of Government’s Electricity Market Reform programme. They include offshore wind farms, coal to biomass conversions and a dedicated biomass plant with combined heat and power. Under CfDs, generators and developers receive a fixed strike price for the electricity they produce for 15 years.

The contracts are supported by the new legislative framework introduced through the Energy Act 2013. Further CfDs will be made available in the autumn and the Government intends to publish further details of the allocation process alongside the Government Response to the January Consultation on Competitive Allocation of CfDs shortly.

By 2020, the projects will provide up to £12 billion of private sector investment, supporting 8,500 jobs, and they could add a further 4.5GW of low-carbon electricity to Britain’s energy mix (or around 4% of capacity), generating enough clean electricity to power over three million homes.

Energy and Climate Change secretary Ed Davey said “These investments are critical to make sure we have got secure, clean energy,” he said, pointing to energy supply issues arising from the Ukraine crisis.  Mr Davey also said the projects would add nearly 5% to the UK clean energy supply. “These are the first wave of our reforms, designed to stimulate investment in low carbon energy, but in a more affordable way than previously,”  However, he added that the measures would add 2% to household energy bills by 2020, when it is hoped some 30% of electricity will come through renewable means. The Department of Energy and Climate Change said it expected the investment contracts for the successful projects would obtain parliamentary approval in May 2014, when they would then take legal effect.

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