The UK government is pledging £265m funding each year to support renewable energy production, in the hope of quadrupling British offshore wind production by 2030. For the first time, the government will provide ‘Contracts for Difference’ funding for emerging technologies such as tidal power and floating offshore wind.
£10m will go towards the category called “established technologies”, such as onshore wind and solar projects in Scotland and Wales, for the first time since 2015. It is hoped that this will encourage 5GW in new capacity.
Some money will go towards newer technologies through the third category, “less-established technologies”. This covers technologies such as tidal power and floating offshore wind, the latter of which will have £24m ringfenced for development.
Businesses bid to become Contract for Difference developers, with those claiming to be able to produce the cheapest energy in each category selected for subsidies.
In August, the WWF reported that, while paying lip service to green investment, the government is currently falling short in green investment by orders of magnitude. The analysis by the environmental charity found that funding equivalent to 0.01 per cent of GDP has been allocated to climate measures in the 2021 budget. The independent Climate Change Committee estimates that annual investment of approximately one per cent of GDP, from both public and private sectors, is needed to deliver the transition to net-zero emissions by 2050. The WWF also warned the government that it is well below target if it wants to meet its target of cutting carbon emissions by 78 per cent by 2035.
Around £145m was originally allocated in the budget for measures designed to tackling climate change, while policies for driving up emissions, such as the fuel duty freeze, equate to over £40bn.