Dear Colleague,
MILLIONS MORE HOMES TO BE POWERED BY RENEWABLES
I am taking the opportunity to write to you regarding plans for the next round of the Contracts for Difference scheme, which opens in 2021. The Contracts for Difference scheme is the government’s main policy mechanism for supporting low carbon electricity generation. The competitive nature of the Contracts for Difference schemehas been successful in incentivising substantial build-out of renewables at scale whilst rapidly reducing costs and ensuring lower energy prices for consumers.
The decision to legislate to reach net zero greenhouse gas emissions by 2050 was a landmark moment for the country and one that cemented our position as a global leader on tackling climate change.
We must now set out a credible pathway for how we will actually achieve net zero in a way that is acceptable to both individuals and businesses across the country. Tackling climate change is a central priority for my department as part of our wider plan to deliver a stronger, greener future for the British economy.
We have already made great strides forward. Over 50% of our power now comes from low carbon sources and coal is all but being eliminated from the mix. While we will need to maintain technological diversity to keep energy supplies secure and low cost, it is clear that renewables are likely to provide the backbone of our power needs in a net zero world. The Committee on Climate Change forecast that we will need to increase the amount of power that currently comes from renewables by fourfold over the next 30 years.
Offshore wind can supply the bulk of this new capacity, given its ability to deploy at scale and our uniquely high wind resource. Offshore wind prices have fallen by 67% in just the last 5 years and are likely to fall further. We can now procure new offshore wind projects that should pay back to consumers, rather than require additional public subsidy.
However given the scale of the challenge in achieving net zero, it is clear that we will have to look beyond offshore wind to other low-cost renewable technologies and emerging technologies that could play an important role in decarbonisation such as floating offshore wind, as set out in the latest manifesto. Choosing to not support the deployment of these technologies will not just make net zero harder to achieve, it is likely to meaningfully drive up the cost of doing so.
In light of our net zero commitments I have therefore confirmed that alongside the next planned auction in 2021 for new offshore wind power and other less established technologies, we will also hold an auction for onshore wind and solar projects and other established technologies.
Robust planning rules introduced in 2015 in England ensure that new onshore wind developments can only be built if planning impacts identified by the affected local community have been addressed and the proposal has their backing. These changes made to the planning guidance mean that planning permission for onshore wind developments can only be granted if the development site is in an area identified as suitable for wind energy development in a local or neighbourhood plan; and following consultation, it can be demonstrated that the planning impacts identified by affected local communities have been fully addressed and therefore the proposal has their backing. These planning rules remain in place.
Local communities will have a more effective voice on developments that impact them, through proposals for tough new guidance on community engagement for developers of onshore wind across Great Britain. Local communities will have a definitive say on whether projects are allowed to proceed. It will remain the case that no English onshore wind project can proceed without the consent of the local community.
Announcing the inclusion of low cost technologies like onshore wind and solar in the next auction shows leadership in the Year of Climate Action, and the year we host COP26. It is a clear demonstration that this Government understands the challenges of net zero and is willing and able to take decisive action now. It also provides further opportunities to support the green jobs of the future and the industrial benefits as a result of renewable deployment, adding to the 20,600 jobs and £628 million of exports each year already supported by the renewables industry.
My ministerial colleagues and I would be happy to discuss this matter in more detail with any Members, especially those who may wish to discuss the impact of future potential projects on communities in their constituencies.
Yours sincerely,
THE RT HON ALOK SHARMA MP
Secretary of State for Business, Energy & Industrial Strategy
