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DECC increases CfD budget

The Department of Energy and Climate Change (DECC) has announced an additional £95m will be available to fund renewable energy projects under the Contracts for Difference (CfD) scheme.

The increased budget now stands at £300m for the first round of funding and will be split between different types of technologies:

  • established technologies, such as energy from waste with combined heat power (CHP), onshore wind and solar farms, will compete for up to £65m in support, as these are considered more competitive
  • less established technologies, such as anaerobic digestion and biomass with CHP, offshore wind and marine energy, will share up to £235m

When the initial CfD details were announced, the Renewable Energy Association (REA) expressed surprise that less proven technologies had been given a higher budget than “cheaper, more established” methods like conventional EfW.

Despite the extra cash, the REA said the scheme was still not delivering value for money or helping new entrants.

REA chief executive Nina Skorupska said: “The allocation process is still too risky and complicated for most of the renewable energy independents and SMEs that are trying to break into the UK’s consolidated energy market, further entrenching the dominance of the vertically integrated utilities.”

She added: “In the short term, the cheaper, more established technologies have been given less than a quarter of the available budget in the first round, with the rest going to the less established technologies. In the longer term, these younger, less established technologies will struggle to achieve cost reductions without minima to guarantee their continued growth.”

Meanwhile, the Government has announced that £9.4m will be made available for heating homes and businesses through low carbon technologies, such as heat pumps, EfW, recovered industrial heat or heat taken from landfill.

Almost £2.4m will be offered to 32 local authorities across England and Wales to support the development of heat network projects, designed to provide more efficient heat to buildings and potentially lower heating bills, through the Government’s Heat Networks Delivery Unit.

Another £7m will be offered to developers across the UK to develop new heat networks technologies, such as recovering industrial heat or EfW.

Energy and climate change secretary Ed Davey said: “Recovering wasted heat from industrial plants or landfill sites means we can heat our homes and businesses more efficiently, as well as helping to drive down energy bills.”

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