From: Department for Business, Energy & Industrial Strategy and Jesse
Part of: UK energy security
First published: 3 April 2017
The second Contracts for Difference auction for renewable technologies
Renewable energy developers will compete for £290m worth of contracts to
support the growth of clean energy in Britain, as the second Contracts for
Difference auction launches today (3 April).
Contracts for Difference are won through a competitive process which drives
down energy costs for consumers and guarantees companies a certain price
for the low-carbon electricity they produce over 15 years. This gives them
the support and certainty they need to attract investment and get projects
off the ground.
The contracts made available today represent the first part of the
Government’s commitment to provide up to £730m of annual support for
renewable electricity projects over the course of this parliament. They
support a key pillar of the Industrial Strategy by ensuring a cleaner, more
flexible energy supply.
Energy Minister Jesse Norman said:
This auction underlines that Britain is open for business to companies
seeking to invest in low carbon energy.
It is designed to deliver clean power to a million homes, create jobs in
the energy industry and provide new supply chain opportunities, while
reducing carbon emissions by some 2.5 million tonnes per year.
The scheme is funded through a levy which forms a part of energy bills and
only projects that offer the best value for money will win contracts. There
is no cost on energy bills until projects are up and running and generating
The auction process starts today and will continue over the coming months.
It is expected to draw to a close by the autumn, when the winners of the
auction and final clearing prices will be announced.
There has been £52bn of investment in renewable energy in the UK since
2010, and for the first time ever exactly half of the UK’s electricity came
from low carbon sources in the third quarter of 2016. The latest contracts
will help the UK build on this success.
The UK is making significant progress in reducing harmful carbon emissions.
Provisional figures released last week show the UK is halfway to meeting
its 2050 target for greenhouse gases reduction, with emissions 42% lower
than in 1990.
View the documents relating to the Contracts for Difference auction
National Grid is the Delivery Body for Contracts for Difference,
responsible for publishing application/allocation guidelines and running
the Contracts for Difference allocation process.
Details about how developers can apply
For media queries please contact Tim Malone on 020 7215 6140 or