Reforms to the energy market, which are aimed at finding greener sources of power generation, have led to a £200 million boost for renewable energy companies. The government says that its reforms to the energy market will mean lower emissions from the power sector and that it would help to lower electricity costs for energy users.
Starting in October, companies from the renewable energies sector will be invited to bid for a share of £200 million; the funding is part of the Contracts for Difference. The competing companies have been invited to bid for a share of funding as the government wants to ensure that newer, greener forms of power generation will be available at the lowest possible cost for energy customers.
The government also announced that there will be another round of funding for the scheme from 2015; a further £150 million will be made available. The new funding is in addition to money already allocated to renewable energy and the government says that the announcement will help to fuel the economy and create new jobs.
Commenting in a press release, Energy and Climate Change Secretary Ed Davey, said:
“Our plan is powering growth and jobs as we build clean, secure electricity infrastructure for the future. By radically reforming the electricity markets, we’re making sure that decarbonising the power sector will come at the lowest possible cost to consumers.
“Average annual investment in renewables has doubled since 2010 - with a record breaking £8billion worth in 2013.
“These projects will create green jobs and green growth, reduce our reliance on foreign-controlled volatile energy markets and make sure bill payers get the best possible deal.”
Mr Davey went on to explain that the investment in green energy would help to create a low carbon electricity system that would be the “powerhouse of the British economy”. It is estimated that the renewable energy investment scheme could help to create a quarter of a million jobs by 2020.
It is hoped that the new system will encourage more competition in the power generation industry and encourage more private sector investment into low carbon power generation.
The budget will be divided into three separate groups: onshore wind and solar, offshore wind, and biomass conversions. Each group will have to compete against each other for a share of the money, thus driving down the costs of energy production for energy customers.