Scotland's offshore wind sector is calling for an increase in the subsidies that underpin new developments needed to further boost low-carbon electricity generation.
Industry body Scottish Renewables and 67 other organisations representing approximately 20,000 jobs have written to the new UK government asking for a larger budget for the Contracts for Difference (CfD) scheme, which guarantees the price that generators can charge for their electricity over a set number of years. This is meant to ensure that developers get an acceptable return on their investment.
The industry's appeal comes after what was described as an "unprecedented" increase in CfD funding announced earlier this year in the Spring Budget. The next annual auction of CfD contracts, Allocation Round 6, takes place later this summer with a total budget of £1.025 billion, of which £800 million is designated for offshore wind.
READ MORE: Renewables projects in Shetland and Orkney win CFD support
However, Scottish Renewables says the impact of high inflation and increased interest rates means more support is needed to meet clean energy targets which include the installation of 50GW of offshore wind by 2030. Most recent figures show that the UK has total installed wind capacity of approximately 29.4GW split almost evenly between between onshore and offshore farms.
The letter's signatories are calling for a further increase to this year's CfD budget after Allocation Round 5 failed to deliver any contracts for offshore wind in 2023.
Scottish Renewables chief executive Claire Mack said the CfD scheme has been a "trailblazer" for boosting renewable energy investment in the UK, but with key deployment targets on the horizon it is necessary to "maximise capacity" in the upcoming Allocation Round 6.
“Scotland’s renewable energy supply chain is poised to secure the opportunities from our impressive pipeline," Ms Mack said. "However, we will only be able to enable the steady deployment of vital Scottish projects by ensuring CfD budgets match their potential.
READ MORE: ScotWind jobs alarm as inflation hits renewables firms
“The new UK government has an immediate opportunity to not only get us back on track to meet our bold targets, but to kickstart economic growth and high-value job creation by uplifting the Allocation Round 6 budget."
More than 12GW of renewable energy projects will be able to enter this year's auction, but Scottish Renewables says only "a fraction" will secure investment under the current CfD budget.
The CfD scheme was established in 2014 to encourage investment in renewable energy projects across the UK. It has supported approximately 29.4 GW of renewable energy generation in the decade since its introduction.
“Maximising Contracts for Difference will also pave the way for the cleaner, cheaper and more secure energy for the benefit of communities across the UK," Ms Mack added.
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