ABB_id2059
in News Departments > Policy Watch
print the content item

The U.K.'s Department of Energy and Climate Change (DECC) plans to introduce a new energy policy that will include renewable energy initiatives and strategies to meet the U.K.'s carbon-reduction obligations.

One of the provisions included in the new energy policy is the "contracts for difference" (CFD) mechanism, which allows for long-term contracts that provide stable revenues for investors in low-carbon energy projects at a fixed level, known as a "strike price," the DECC says.

According to the DECC, these contracts will help developers secure the large up-front amounts of capital investment required for low-carbon infrastructure such as offshore wind farms, nuclear powers stations, and carbon-capture and -storage plants.

By providing a fixed price, the contracts will help lower the cost of capital and protect consumers from high bills by clawing back money from generators if the market price of electricity rises above the strike price, the DECC explains.

In addition, the U.K. government will establish a new body to act as a single counterparty to the CFDs with eligible generators. The counterparty will have levy-raising powers to enable it to raise funds from suppliers to meet its costs, including payments to generators.

Furthermore, a capacity market will provide an insurance policy for government against future supply shortages, as there is an increased risk to security of electricity supplies toward the end of the decade, when a fifth of the U.K.’s existing capacity is set to close. As part of this initiative, more intermittent (wind) and inflexible (nuclear) generation will be built over time to replace the retired plants.


Hybrid Energy Innovations 2015

Trachte_id2056
Latest Top Stories

The Song Remains The Same: AWEA Says Stable Policy Can Protect U.S. Wind Investment

Although the U.S. wind industry added more than four times the amount of wind in 2014 compared with 2013, predictable policy is needed to sustain its long-term success.


High Net-Worth Investors Claim 'All Of The Above' On Energy, Renewable And Otherwise

According to a recent Morgan Stanley poll, high-dollar investors favor investment in renewable energy technologies, such as wind and solar.


U.S. Wind Power Installations Surpassed 4.7 GW Last Year, Although China Still Leads

Bloomberg New Energy Finance reports that U.S. wind installations came back in a big way from a disappointing 2013.


IRS Specifies Performance, Quality Standards For Small Wind Turbines

The Internal Revenue Service (IRS) recently issued guidelines creating safety and performance standards for small wind turbines to be eligible for the 30% investment tax credit.


Hot Times North Of The Border: Canada Tops Previous Record For Installed Wind Capacity

For the second consecutive year, Canada's wind market has bested the country's previous mark for new installations.

Hybrid Energy Innovations 2015