The UK plans to expand its support program for renewable energy sources

(Reuters) – Britain plans to expand its flagship renewable energy support program to encourage investment in the sector, the government said on Monday, launching a consultation on proposed changes.

The Contracts for Difference (CfD) scheme is a government mechanism to support new UK low carbon electricity generation projects, such as offshore wind and solar projects.

Under a CfD contract, generators are guaranteed a fixed, pre-agreed price for the electricity supplied throughout the duration of the contract, and they sell low-emission energy on the market.

The programme has so far supported 26.1 gigawatts (GW) of low-emission projects, but the government said changes were needed “in light of the implementation challenges currently faced by the renewable energy industry”.

The potential reform of the scheme could see applicants rewarded for “non-price” factors such as supply chain sustainability or addressing skills gaps and innovation, the Department for Business, Energy and Industrial Strategy said in a statement.

This could help increase investment in the sector, grow the economy and strengthen the UK’s energy security, it added.

“Factors such as inflation, rising commodity prices and international competitive pressures mean the UK will need to continue to work hard to attract the investment needed to achieve our Net Zero and energy security targets,” said Adam Berman, deputy director of advocacy at Energy UK, the energy industry’s trade association, in a government statement.

The government has set targets for, for example, a large increase in wind energy production, as it aims to achieve a net-zero emissions target by 2050 and become independent from imported energy after supply disruptions caused by Russia’s invasion of Ukraine.

Last month, the UK unveiled further plans to boost energy security and cut emissions, but critics said a lack of new investment and incentives meant they failed to provide any new impetus to the country’s green energy sector.

The consultation will end on 22 May.

(Reporting by Nora Buli; Editing by Susan Fenton)